USEJ_Fall.11.4.ISSUU.2 by Stone Griffin Media

US EXECUTIVE JOURNAL

THE MAGAZINE FOR LEADING INDUSTRY EXECUTIVES

FALL 2010

HobbyTown USA THE BUSINESS OF HAVING FUN

Delta Targets

Hitting the Bull's Eye

Lenny's Sub Shop

Generous Rewards to Customers and Investors

www.usexecutivejournal.com

Editorial LETTER FROM THE EDITOR Our Fall Edition comes out while many are facing their fourth quarters in this tough econmic year. The Fall stories are a testimony to the strength of time-tested business practices and the importance of rock-solid relationships. Here at US Executive Journal, we continue to be encouraged and impressed by the durability of numerous companies from around the country. We are optimistic that our Winter publication will be able to continue with our theme of endurance and optimism in these challenging economic times. For example, companies such as HobbyTown USA are now proud to call themselves the largest retail franchise hobbyist store in the United States. They believe their success is due to their strategy to grow both within and outside the U.S. They also have a wide selection of hobbyist toys and products, which allows them to attract toy train collectors to remote control toy enthusiasts, and all other hobbyists. When George Alvord and a group of investors purchased Lenny's Sub Shop in late 2004, they had a vision of superb sandwiches complemented with “more food, more taste, and more personality,” as stated in the restaurant’s motto. They trained their staff to let their personalities shine, and believe in marketing to the local community. These extra touches have allowed them to not only see growth, but also it allows them to separate themselves from the competition. As executives navigate their way through the rough waters of this economic atmosphere, companies are forging ahead, finding the strategies that not only keep them strong but that will also ensure their survival and even success during these turbulent times. The resilience that has rebounded many industries deserves more than praise during this historic moment for our country and ever-globalizing market economy. If your company is surviving, working on exciting projects, and growing during these tough economic times, we want to hear from you. We would like to feature you in our next edition, so please contact us at info@bullrunmedia.com. Enjoy the Fall and our Fall Edition!

— US Executive Journal

PUBLISHER Bull Run Media

Food & Drink

table of

contents Page 9 Lenny's Sub Shop

Generous Rewards to Customers and Investors

In the absence of a great Philly Cheesesteak and sub sandwich restaurant in the Southeast, Lenny's Sub Shop franchise is winning the market and satisfying appetites with its hefty sandwiches and generous customer service.

Page 62 HobbyTown USA

The Business of Having Fun

HobbyTown USA, a full-line specialty toy franchise retailer, recently held its 16th Annual Convention and Trade Show at its headquarters in Lincoln, Nebraska. While vendors and franchise owners were living every hobbyist’s dream inspecting and tinkering with the hundreds of new specialty toys that filled the convention center’s ballroom, they also had much to be proud of.

ASIAN FOOD SOLUTIONS INC. On the Cutting Edge with a Niche Market

On the cover

LENNY'S SUB SHOP Generous Rewards for Customers and Investors

CAINS FOODS LP A Long Tradition of High-quality Ingredients and Stand-out Taste

KIOLBASSA PROVISION COMPANY Supplying Texas with Smoky Flavor

38 BIGELOW TEA COMPANY Big Things Come in Small Packages

40 GOOD HEALTH NATURAL PRODUCTS INC. Chewing Up the Better-for-you Snack Market

43 PROTEIN ALLIANCE Passionate about Turkey

Insurance

OCCASIONS CATERERS Creating Luxury Events for the 46 Nation’s Capital MORROW INSURANCE COMPANY Staying Committed to Their 20 Industry OAK STEAKHOUSE Fundamental Passion Drives 48 Success VGM INSURANCE Staying Ahead of Challenging Times

LISCIO'S ITALIAN BAKERY Quality in the 21st Centruy

Education

THE COUNTRY'S BEST YOGURT Getting Just Desserts in Lean Times

ANNA MARIA COLLEGE Educating Students to Give Back

HEIDI AND ARTHUR CHOCOLATIERS 'Chocolate Does Make You Happier'

ONE NATURAL EXPERIENCE Promoting Health and Ecological Responsibility

TREFZ & TREFZ INC. A Model of Loyalty and Integrity

Page 66 Delta Targets

Hitting the Bull's Eye Liscio's Italian Bakery | page 22

US Executive Journal Fall Edition 2010

COCHISE COLLEGE Preparing Students for Soldiering Through the Real World

Spotlight

BENNINGTON MARINE The Best Pontoons on the Market

HOBBYTOWN USA The Business of Having Fun

DELTA HI-TECH Versatility Keeps Delta Hi-Tech Strong through Recession

GASTAR EXPLORATION LTD. A Cyclical Approach to Exploration and Production

Energy 79

DEL SOL L.C. 66 Harnessing the Sun to Create Smiles DELTA TARGETS Worldwide Hitting the bull's Eye

Manufacturing

THE GREER COMMISSION OF PUBLIC WORKS Pumping Resources throughout its Community

DFI SYSTEMS INC. 85 Offering More than Just the Average PHOENIX DRILLING INC. House Experience and Versatility

AMTEC CORPORATION Acquiring Potential to Grow Success

88 MOUNTAIN V OIL & GAS, INC. Establishing a History of Energetic Growth

BACCUS GLOBAL LLC 93 Innovative and Effective Tools for THE INDEPENDENT PETROLEUM Auto and Home ASSOCIATION OF AMERICA Advocates for Americaâ&#x20AC;&#x2122;s Energy 77 Autonomy BARRON LIGHTING GROUP Directing Light Shed across America 95

WESTERN ENERGY ALLIANCE Positioning the Intermountain West within the Energy Industry

99 Del Sol L.C. | page 58

BALLARD PETROLEUM HOLDINGS LLC The Energy to Explore an Industry

Healthcare 64 ASEPTICO Creating Portable Dental Units for Improved Health, Worldwide

Delta Targets | page 66

Food & Drink

Asian Food Solutions Inc. On the Cutting Edge with a Niche Market Produced by Sean Barr & Written by Amy Bonn Lincoln Yee, president of Asian Food Solutions Inc. (AFS), had worked in the restaurant industry for several years when he first developed the idea of providing highquality, nutritious Asian meals for school lunches. AFS’s line of school lunch items is based on three core principles: nutrition, taste and value. The company’s ability to deliver consistently on those three principles is a fundamental reason for its success. Yee notes that the company’s offerings, launched in 2007 with partner Allan Lam, are well-matched with the current national concern over healthier eating, especially in schools. The company’s efforts to introduce healthy eating habits to children have not gone unnoticed. Yee reports that AFS’s

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products have been reviewed and meet the approval of the nonprofit Alliance for a Healthier Generation. A Focus on Health, Nutrition and Variety AFS’s focus is not solely on the K-12 school lunch industry. The company also sells its individually quick frozen Asian foods to universities, hospitals, cafeterias, casinos, the military, and grocery stores. AFS’s commitment to providing healthy, nutritious fare to all of its customers led naturally to its newer focus on schools. Since the company became involved in the school lunch business it has rapidly expanded, becoming a federal contractor and providing meals for students in 26 states. Based in Oviedo,

Food & Drink Fla., AFS currently employs around 100 direct and contract employees in its sales and production departments.

food offerings in school lunches will become more and more popular with exposure.

Yee emphasizes that AFS is on the cutting edge of food production with its heat-and-serve, high-quality proteins and proprietary, custom-blended sauces. The Food and Drug Administration is currently planning to mandate a reduction of salt use by restaurants and food manufacturers. Yee reports that AFS took major steps upon launch to reduce the amount of salt in its products. No MSG (or trans fat) is allowed, and Yee met with food research and develop professionals to carefully modify the chemistry development a good-tasting soy sauce with the lowest possible sodium. The sauce has met acceptable

A Plan for Continued Growth While AFS has had solid success over the past three years with its school lunch offerings, Yee says he has even loftier goals for his company. Within the next two years, his goal is for AFS to a national general food service company and to increase its current gross annual revenue of $15 million to $50 million. “We want to be the market leader in frozen Asian prepared foods.” Yee’s strategy thus far indicates that the company is on the right track. He reports that the recent downturn in the economy has had no real effect on AFS because of the huge niche market for its offerings, for which there has been high demand. To achieve AFS’s goals, Yee stresses the importance of maintaining a close relationship with consumers. He explains, “As the president, I still make sales calls, so I’m close to the consumer. Being close to the consumer allows me to stay cutting-edge … As the president, I think it’s important for me to stay ahead of the market curve.” Yee observes that being in the field and close to the consumers allows him to gain a good, solid understanding of what drives consumer behavior; he can then work closely with those in research and development to determine what the company should produce.

sodium levels for consumption in schools and hospitals. While AFS has focused its efforts primarily on prepared Chinese food – such as sweet and tangy Tangerine Chicken, grilled Asian-style Bourbon Chicken, zesty Spicy Chicken, and ready-to-eat Vegetable Fried Rice – the company is expanding its repertoire and offering new Indian and Thai foods, as well. The company recently introduced a curry chicken dish, which it distributes for school lunches. Yee notes that no other companies provide this food item to schools. AFS saw the opportunity for mass-market appeal of a new product, and initial tests of the dish showed positive reactions from students who tried it. Yee remarks, “Trends catch on because, basically, things become less foreign, more familiar.” He believes that healthy Indian

US Executive Journal Fall Edition 2010

Yee keeps his general business goals in mind with each facet of running AFS. The company outsources most of the production of its foods, and Yee chooses packers and vendors who are responsive to the company’s goals. “We may be a small company,” says Yee, “but being small doesn’t mean that our [packers and vendors] should be short on service … We want supply chain partners who are willing to grow with us and partner with us for the future.” Yee notes that AFS possesses both the vision and the ability to execute its business plans. Due to Asian Food Solutions' sound business strategies and commitment to its core principles of health-oriented, restaurant-quality affordable meals, the company has the foundation for continued growth and success. n

Lenny's Sub Shop Generous Rewards to Customers and Investors Produced by Hanim Samara & Written by Erik Hyrkas In the absence of a great Philly Cheesesteak and sub sandwich restaurant in the Southeast, Lenny's Sub Shop franchise is winning the market and satisfying appetites with its hefty sandwiches and generous customer service.

about a half a pound of meat and cheese on a regular-sized sandwich,” says president Brent Alvord. And if that isn’t enough, Lenny’s larger sandwiches have about a pound of meat and cheese.

When George Alvord and a group of investors purchased Lenny's Sub Shop in late 2004, they had a vision of superb sandwiches complemented with “more food, more taste, and more personality,” as stated in the restaurant’s motto.

In addition to giant subs, Lenny’s has authentic Philly Cheesesteaks cooked hot on the grill. “It’s one of the top selling items in our restaurant. So between the sliced fresh and the Cheesesteaks, they both live up to one of our mottos, ‘Authentic Philly Cheesesteak and the deli fresh experience.’”

More food is right. With Lenny's sliced-to-order tradition, customers can watch premium meats sliced deli style before their eyes and put right onto their sandwich. “We put

To market the mouth-watering subs for the opening of the Louisville, Ky. restaurant, Lenny’s staff served $3 subs

the entire day, and gave the first 50 customers FREE subs for an entire year. In terms of competition, Alvord says, “I think more than anything else, the key differentiator [between competitors] is probably our personality.” If “Cheers” had been a sub shop, a Lenny’s restaurant would have been the closest thing to it. “We actually train our employees to have their personality shine,” says Alvord. Lenny’s staff is known to make an honest effort to make customers feel welcome by learning the names of guests, asking how their meals are, and doing something unheard of by most sub shops — cleaning up after them. “Trash cans are unavailable for guests in the dining rooms,” Alvord says, and he encourages customers to get up and leave when they are done eating.

Food & Drink A Growing and Supportive Franchise in a Tough Market Like many businesses in this economy, Lenny’s has had some difficulty finding new franchisees. “Banks only lend if you have the money already... and by and large, most financing sources have dried up and changed,” says Alvord. “It has become much more challenging to get people financed versus previous years.” But despite those financing difficulties, Lenny’s Franchise manages to keep growing. Since the purchase of Lenny’s Sub Shop six years ago, the business has gone from 43 restaurants (mainly in the Southeastern United States) to over 150 locations reaching New Mexico and Texas up to Michigan and over to Virginia.” Currently Lenny’s Sub Shop’s total revenue is $70

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US Executive Journal Fall Edition 2010

million to 75 million annually, and they’re looking ahead to possibly continue growth all across the country.

Operations are visited once a quarter by advisers and traveling executives.

“We invested a lot of capital in terms of building the business, and like our sandwich offering has a lot of meat, we want to make sure our franchise offering has a lot of meat to it, in terms of support and really caring about or franchisees being successful,” says Alvord.

Moving Forward

Lenny’s offers a tremendous amount of support for franchise owners including online training, and a six-week university program with in-class sessions and skill-set building. Lenny’s Sub Shop also has its own proprietary computer software system that does sales reporting, counts coupons, and calculates restaurant performance. There’s even an construction management program called the “Lease-to-Key” program, which handles most construction aspects for new franchises, so franchisees can focus on their training. “They don't need to learn how to manage contractors, deal with different bids and so forth,” says Alvord. Lenny’s Sub Shop supports field operations with assigned marketing advisers and franchise advisers who touch base with franchise owners every couple weeks.

With Lenny’s success comes new changes. The shop has just launched a “Substantial Rewards Card,” an electronic version of the stamp cards many sandwich shops offer their customers. If someone buys nine subs, they get the tenth free. People can swipe their card or enter their telephone number to receive credit. The system is intended to minimize fraud for the franchisee, and it keeps track of customer purchases so they don't have to worry about losing their card. Lenny’s began online ordering last year, launched a new French dip sandwich last December, added magnetic menu boards for easy menu changes, and has a new Hot Italian sandwich launching in November of 2010. Lenny’s Sub Shop franchises have a $25,000 fee due at signing, 6 percent Royalties, and 2 percent goes to the National Marketing Fund. To learn more about Lenny’s Sub Shop franchise opportunities, please visit www.lennys.com. n

Food & Drink

Cains Foods LP A Long Tradition of High-quality Ingredients and Stand-out Taste Produced by Matt Duncan & Written by Molly Cohen Condiments are the little details that can make or break a meal. When used correctly, they can add flavor and texture to food. However, if made of poor quality, they can easily ruin a feast. Cains Foods LP has discovered the perfect ingredients and exact recipes for its line of mustards, dressings and mayonnaises to make them a necessary addition at any dinner table.

location in Faneuil Hall Marketplace in the greater Boston area, Cain reinvented the common mayonnaise recipe to include natural ingredients that kept the creamy mixture from separating and losing its color. In 1926, just two years after releasing the new mayonnaise recipe, the company was so successful it moved to a new location in Cambridge for more space.

Expanding Through the Industry

At its new headquarters, the company continued selling mayonnaise, but also brought sweet relish, horseradish, sandwich spread, tartar sauce and Russian dressing into its production process. Eventually the company also became involved in the potato chip business, but then sold it after 50 years of business. In 1950, John E. Cain passed away, leaving his son Robert in control of the company. Robert easily continued the tradition of high quality products started by his father.

The company was originally founded by John E. Cain in 1914 as a cheese distribution company. While working from his

In 1955, the John E. Cain company got into the pickle business, expanding its product offerings and making it easy to continue producing relishes. Then, in 1973, after the invention of direct delivery to grocery warehouses, the company moved to its current facility in Ayer, Mass., where it continued business by focusing on mayonnaise and new lines of salad dressings. Although the John E. Cain company was sold in 1986 to BolsWessanen, it did not lose the Cain name; instead, it became Cains Foods. Through this change, Cains Foods began servicing the retail and food service industries. In 1995 Cains Foods was purchased again, this time by Denis J. Keaveny, who is the current president and CEO. Keaveny was interested in preserving the historic company, as well as famous local flavors. Thus, three years later, he purchased the Olde Cape Cod Company, adopting their salad dressings, mustards, chowders, tartar and cocktail sauces into a specialty line available through Cains Foods. In 2000, Keaveny sold the companyâ&#x20AC;&#x2122;s pickle division to a separate private company; now Cains Foods sells predominantly mayonnaises, salad

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dressings, mustards, barbecue sauces, tartar sauce and sandwich spread.

any impending rollouts planned. “I’m sure there will be some, but nothing eminent. We’re always working on new things,” Keaveny shares.

Differentiating Products Cains Foods has about 115 employees and annual revenue of $35 million. It differentiates its products from the competition based on its recipes. “Our mayonnaise has a unique, all natural formula compared to [competitors]. We make great quality products and we believe we give pretty good customer service to our customers,” says Keaveny. In the last couple of years, Cain Foods faced the same challenge as many others in the industry: rising commodity costs. “First we had the commodity run up in 2007 and 2008. The commodity costs went way up – soybean oil and eggs in particular to us – as well as everything else,” Keaveny remembers. “We wound up losing money on that, those [costs] were rising up faster than we could raise our prices.”

And Cains Foods’ future shows the potential for large-scale expansion based on its long history of quality products and customer service throughout numerous food industry sectors. Keeping its focus on natural and delicious foods, Cains Foods will continue to delight taste buds across the nation. n

Besides the ingredient cost changes, the economy brought on unprecedented client turnover. “During the economic downturn our retail sales have held up – both branded and private label have held their own and actually increased during the downturn. The existing base of our food service customers has showed a decline. Obviously restaurant traffic went way down but we were fortunate to pick up new customers to offset those losses,” Keaveny shares. To spread its products to all of its customers, Cains Foods uses a distribution manager and a transportation manager who coordinate with common carriers. This method will be used for Cains Foods’ new product line. “Over the past year we introduced a new line of salad dressings, Naturally Delicious that is all natural and is well received so far,” says Keaveny. Beyond the new Naturally Delicious dressings, Cains Foods does not have

Food & Drink

Occasions Caterers Creating Luxury Events for the Nation’s Capital Produced by Sean Barr & Written by Molly Cohen Occasions Caterers, one of Washington, D.C.’s most sought-after catering companies, was inspired by a lack of innovative style in the industry. It began when twin brothers Mark and Eric Michael graduated from college in the mid-'80s. Mark attended Stanford University in Palo Alto, Calif., and Eric studied in the Washington, D.C. area, and “we had a phone conversation about who is going to move to which coast ... he won that argument, so I moved here,” says Mark. Mark received his bachelor’s degree in political science. When he moved to D.C., he interned on Capitol Hill and worked with his brother at local catering companies for pocket change. But in 1986 Mark lost his taste for legislation and looked to start a full-time business with his brother. “It became apparent to us that there was a shift going on in the [catering] industry from old world-type catering to a newer style,” Mark recalls. “And we thought to ourselves, we can do a better job than a lot of the companies we were working for. We liked the catering pace and the excitement of it, so we made business cards and started cooking out of our apartment kitchen. I bought a beat-up old van, some pots and pans, and did all the cooking for the first two years for friends and family.”

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As time went on, the Michaels developed “a vision for doing high-end events, events that involved creativity and customized events,” as Mark explains it. But, the company had to start small. “We started doing a lot of drop-off lunches and birthday parties. We cooked everything for the first two years, and then our first hire was a chef. We moved into a small commercial space and sort of grew bit-by-bit, then we invested in a larger commercial kitchen and just kept growing from there.” It was one particular event, however, that catapulted Occasions in to the big leagues, according to Mark. “Clinton’s first inauguration was the first time we went from being a small company to being recognized and asked to do really a largescale, very detailed-oriented event, and we did some wild stuff back then in 1993. Because of our efforts, it put us on the map for good,” Mark remembers. “It came to us in the eleventh hour; they said, ‘Can you do this thing in three days? It’s going to go all night and there will be major entertainment.’ It was exciting.” Solid Positioning and Supportive Partners Now, Occasions operates out of a 50,000-square foot facility, located just south of the Takoma Park area, and serves the

downtown Washington, D.C. area, plus parts of Virginia and Maryland. “It’s all within the Beltway, or 10 to 15 miles outside in any direction,” Mark explains. While its service area is specific, Occasions does not have a particular niche. It caters every type of event, from weddings, corporate events and social entertaining to institutional work for governmental groups, the Smithsonian Institution and an array of nonprofit organizations. “It runs the gamut from low-budget events to galas. Our niche is that we do a lot of things well and we’ve staffed our sales department with a variety of personalities and different capabilities,” Mark shares. “We’ve never been after one niche; we never wanted to be pegged as the wedding caterer or the social caterer. We like doing something different every day.”

Occasions took an approach to “educate and encourage customers to take chances and try new ideas – that was a prevailing challenge, to work with tighter budgets and offer more value and creativity,” Mark remembers. “We’d rather cut margins and make our events as nice as they can be, because at some point this thing is going to repair itself and we want to be in a position where people are going to go for new ideas and the caterer who pushes the envelope forward.” These challenges have not deterred Occasions from looking ahead to its upcoming 25-year anniversary. “We’ve worked with some people for many years; there are also new vendors who come in and out,” says Mark of the company’s top-notch vendors. “We try not to get too comfortable with anybody so we always have two or three [purveyors], and if someone in

And, although the company has grown, Mark and Eric maintain a hands-on approach to managing their company. “Eric is involved on a daily and nightly basis; he has his own staple of clients and is very involved as the creative director, and he also leading the sales team when it comes to the look and style of Occasions,” Mark explains. “I’m the CEO, so I’m the traffic cop in the business; I make sure we can deliver what we promise.” Mark and Eric oversee the company’s 120 employees and 500-plus contractors who work the events. Their management style has proven successful; last year, Occasions’ revenue reached $29 million. Part of this success comes from repeat business. “There are relationships we’ve developed over time, and we’re happy to be in a position where if three or four names are given out, we tend to be one,” Mark says. Despite its loyal clientele, Occasions was challenged by the economic drop. In an industry where staying fresh and innovative is key, it was challenging for Occasions to “stay upbeat about entertaining ideas. I called it 'the doldrums' last year, because people always looked at the budget first and not the content of what we or our competitors proposed. When you get into that atmosphere, it’s hard to distinguish yourself based on the quality of what you have to offer or new ideas or fresh entertaining concepts,” Mark explains.

our purchasing department feels one is getting lax or prices are going up, we bid business out.” Currently, Occasions is reinforcing its relationships with local producers. “We’ve been establishing relationships with local farmers, especially seasonally with produce,” Mark shares. ”We work very hard to establish some strong relationships with farms and co-ops to provide us with bulk during the season.” There are several qualities Occasions expects from its vendors. “It’s pretty finite – consistently responsive service and the quality of the product to be way up there. Whatever is a good or service they are offering has to be tested, and we don’t like being guinea pigs so we’ll try someone out when

Food & Drink we know them ... we like to find what people’s sweet spot is and we’ll go with that,” Mark explains. Price flexibility is also an important attribute. During fundraising season, Occasions might ask its vendors to assist with events since it is not being paid enough to cover all services. “When it comes to opportunities to co-promote, we definitely like to work with certain people that offer the consistency of service and quality of product, plus the understanding of partnering for a cause,” Mark simplifies. Occasions often hears of new vendors through its affiliation with the International Special Events Society (ISES). “We have had a long relationship with ISES. I remember when it first hit D.C. and was a small, fledgling organization without a lot of direction, so it’s come a long way since the 20 years I’ve been part of it,” Mark reminisces. “Our experience has been heavy involvement to other years when we weren’t as involved. I see it as a marketing source and information source, a gathering place for people in the industry to share ideas.”

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The ISES is well-known for its ability to bring industry executives together. “I like the informal networking. We’ve got a great group of people who service the industry in Washington, so it’s fun going to the events, and over the years that’s been the value for us – meeting and hearing about new vendors and getting the skinny on what’s going on in the industry,” Mark shares. “I think my favorite ISES memory is at the galas at the end of the night when everyone is dancing, that’s the best part for me. We’re competitors by day, but we can come together and have fun.” Mixing It Up for Future Growth While Mark enjoys sharing information at ISES events, Occasions has a new service Mark feels will continue to set the company apart. The company recently partnered with one of D.C.’s best-known mixologists, Derrick Brown, who created a list of handcrafted cocktails specifically for Occasions. Brown trained the company’s staff to make this “great list of really cool handcrafted cocktails with unusual ingredients,” Mark touts. “Instead of getting a bar with a bunch of glasses and the regular mix of alcohol, we have a

more exciting offering for someone who can make specialty drinks, or if you want something special they can handcraft something for you.”

the company’s reputation, Occasions Caterers has the components to increase its foothold in Washington, D.C.’s entertainment sector for many years to come. n

Although this artisan cocktail trend might end up cooling off in a year or two, they are selling well and add to Occasions’ list of distinctive services. The company is also “getting close to rolling out a new dessert menu with a new pastry chef,” Mark adds. Occasions is also working to further develop its business. “We have a new tasting facility that we’ve 99-percent completed, so that will be fun for our customers and potential customers to test out a new experience,” says Mark. Occasions is also involved with the green movement through its sustainability initiatives. “We find efficient ways to compost at all of our events,” Mark shares. With these new initiatives, Mark looks forward to organic growth in Occasions’ future. “We know the marketplace well, we like what we do, and we want to continue putting ourselves in positions where we have the opportunity to service clients. It’s not about getting bigger, because that’s not fun for me. What’s fun is having the breadth of work and having the opportunities to work on interesting projects that keep everybody fresh and energized,” he says. Mark plans to spend the next one to two years “scratching out market share,” he says. “We want to build back the market share we lost from the down economy, one event at a time. We’re not trying to take all the business in town; we just want to be in a position where we are competitive and doing business.” This goal seems possible as Mark sees the Washington, D.C., area quickly recovering from the economic drop. “It’s already repairing itself much faster than rural American and middle America, so we’re thankful to be in this marketplace; we like being in an area where people have some disposable income and like to entertain. To go out and hire a caterer is a luxury and we recognize that. We’re seeing a lot more opportunity this year than we did last year, so we’re happy about that,” he shares. With these opportunities, Occasions can immediately begin recovering its market share using its creativity, experienced staff and new company initiatives. With Mark and Eric’s passion for the industry and

Food & Drink

Oak Steakhouse Fundamental Passion Drives Success Produced by Sean Barr & Written by Catalina Lupu Brett McKee — chef, entrepreneur, family man and renegade — is a self-proclaimed “Mr. Field of Dreams.” The tough-talking optimist graduated first in his class from the New York Restaurant School in 1984 after discovering a passion for food in his mother’s kitchen in Brooklyn. His career ranged from working as a dishwasher to successfully

detail, from the menu to the bartenders’ clothing to the diners’ questions and comments. The concept is based on a high-end chop and steak restaurant with Italian influences and additions to the menu. McKee credits part of his success to his assiduous gathering of information about the patrons and their choices and experiences. “I cook great food and provide an even better time,” says McKee, “I provide a great night; I sell good times as a package at Oak Steakhouse.” McKee’s efforts to tailor the dining and entertainment experience to patrons also guided his new restaurant concept, the roadside kitchens. With 15 North, in Charlotte, N.C., and 17 North, in Mount Pleasant, S.C., McKee set out to “develop a restaurant concept based on social networking,” where the menu is modified by the input of diners and fans through social media. At these roadside kitchens, McKee encourages diners: “tell us your dish, give us your story, and we’ll make it better than you remember.” McKee is currently working on expanding this restaurant concept in Atlanta, Nashville, Raleigh, Chattanooga, and Washington, D.C.

opening several restaurants around Charleston, S.C. But McKee’s most important project thus far has been Oak Steakhouse, a restaurant he opened in 2005, in a gutted 1840s building on historic Broad Street in Charleston. Oak Steakhouse is a four-floor, five-dining room establishment where McKee lavishes attention on every

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With a book in the works, a reality TV show in production, three restaurants to manage, and plans to open five more in the near future, McKee has not let the economic downturn affect his business. In fact, McKee asserts “the economy dictated my new concept of the roadside kitchens” and “instead of viewing something as a challenge I look at it as a solution to a problem.” In managing several successful businesses, McKee says, “instead of making cuts I’d rather drive sales,” and make “good profits versus bad profits” by ensuring his customer base, promoters, and vendors are happy. He successfully supervises the management of his restaurants with respect and “good open communication.” He says, “I try not only to be a good businessman with people, but also to be a good friend to people.” While McKee credits his food and his business strategy to his success, he also recognizes the community that continues to make his restaurants successful. He estimates

he has raised $15 million over the last 20 years for charities in Charleston, including Darkness to Light, Hospice of Charleston, and the American Heart Association. While he foresees great expansion in the future for his roadside kitchen ventures, McKee asserts that Oak Steakhouse is different. He says, “Everyone wants a piece of Brett McKee, and everyone wants an Oak Steakhouse,” but acknowledges the pitfalls of growing irresponsibly. Oak Steakhouse’s significance, he says, is “not just the food and the concept [but also that] you really have to give a lot of yourself to the community to be successful.” McKee says he understands the importance of maintaining a local, personal, communal dining space, and declares, “I’m not going to grow myself into failure.” Perhaps the successes of McKee’s Oak Steakhouse, his sushi restaurant O-Ku, and his rapidly expanding roadside kitchens depend on his positive economic outlook and optimistic opinion of his ventures. McKee says his ventures are great, but he points out, “things are only as great as you make them.” Faced with opportunities to expand his restaurant and businesses, McKee’s drive to succeed hinges on his fundamental passion for food, family, and community. “I’m expanding rapidly with other concepts and restaurants,” he says, “but you’ll always find me at Oak Steakhouse.” n

Food & Drink

Liscio’s Italian Bakery Quality in the 21st Century Produced by Sean Barr & Written by Shirley Lung In 2001, Liscio and Vilotti officially joined forces. At the time, their retail and wholesale product lines were doing well, but knowing the ins and outs of the baking business, Vilotti saw great potential in further expansion. For the next few years, the duo would hunt for a new building to accommodate a larger tunnel oven and other state-of-the-art equipment, not knowing that the future bread production facility would ultimately be right around the corner from their Glassboro location. With a much larger building, over 30,000 square feet covering nearly six acres, Liscio and Vilotti spent the next year retrofitting the interior with the most sophisticated equipment in the industry. In the midst of this flurry of growth, they would manage to build a new retail location in Washington Township, equipped with a deli. An investment well made, revenue went from $2 million to $3 million to nearly $15 million annually. It’s a classic story, steeped in decades of tradition and family values. Having worked as a foreman at an established New Jersey-based bakery for many years, James Liscio fulfilled his dream of owning his own when Liscio’s Bakery opened its doors in 1994. What started out as a tight-knit family operation at Black Horse Pike in Sicklerville, N.J. is now one of two retail locations in the tri-state area. Liscio’s humble beginnings as a purveyor of Italian breads and rolls to a few wholesale accounts, as well as local customers at its retail location, quickly blossomed into a multi-million dollar venture as word of his quality bread got out. Liscio began expansion in 1998 when his original store was no longer able to keep up with climbing sales. Choosing a location in Glassboro, his new bakery, more than double the size of the original 2,800 sq. ft. store, accommodated bread production as well as retail demands. Confident in his new location, Liscio imagined he’d be there for the long run. But, as rising fortune would have it, he was wrong. Around this same time, his future partner and long time friend, Chad Vilotti, decided to sell his food ingredients company which had supplied many bakeries in the area. Also with history of the trade in his family, (Vilotti’s greatgrandfather actually opened one of the first Italian bakeries in Philadelphia), Vilotti himself got his start interning in his grandfather’s flour distribution business, a division of the family bakery, as an undergraduate at Villanova University.

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Despite the rapid development and extensive renovations, Liscio’s Italian Bakery is the picture of big business meeting quality production. Vice President Chad Vilotti states, “The goal is not to be the biggest, but the best.” With that creed in mind, Liscio’s Italian Bakery oversees virtually every element of production. Having been with essentially the same suppliers since day one, the bread producers scrutinize and research all aspects of a company before they decide to do business with them. With that same attitude and vigilance, Liscio’s gives all new products the same treatment, knowing their reputation is on the line with each bite. Always wanting to improve their already successful company, they take consumer feedback seriously though there are hardly any complaints. Of course, challenges are always looming overhead. With so many steps from production to distribution, the company goes to great lengths to ensure a quality product. They have back-up equipment in case of equipment failure. They have trucks at the ready to guarantee freshness. They have all certification to remain in compliance with labor regulations. However, even with safeguards in place, uncertain weather and economic conditions can topple any business. Keeping the business running is a “24/7 operation […] you just can’t take a day off,” Vilotti asserts.

In line with day-to-day business is staying relevant. With the whole wheat cultural health food movement in full swing, Liscio’s is keeping up. Currently, they are researching and experimenting with a whole wheat roll option and are in talks with potential clients. Additionally, Liscio’s is looking beyond its current geographical footprint with a frozen Philly Cheese Steak product in collaboration with a Philidelphia-based restaurant. Unlike other frozen products, Liscio’s bread roll is kept separate from the Cheese Steak meat in the packaging. For those who live outside of the tristate area, authentic Philly Cheese Steaks may soon be hitting your local supermarket.

With ambition and family values, they have created a great quality product. n

With “so many balls in the air” (Vilotti), Liscio’s maintains that homespun outlook that made it successful. Liscio and Vilotti have eight boys between them, and they herald family as the most important.

Food & Drink

The Country's Best Yogurt Getting Just Desserts in Lean Times Produced by Hanim Samara & Written by H. M. Kuldell The more obsessed Americans are with their waist lines, the better business is for The Country’s Best Yogurt (TCBY). Since its debut, the frozen dessert franchise has flourished as Americans embrace dieting and the fitness craze. Aerobics, jazzercise, bodybuilding … America in the 1980s was fitness-obsessed. But Frank and Georgia Hickingbotham knew the country still had a sweet tooth. In 1981, the pair opened the first TCBY in Little Rock, Ark., introducing frozen yogurt as an alternative to fat-filled ice cream treats. “When it first opened up, there were lines around the block. They hadn't seen frozen yogurt before,” says Michael Ward, president of franchising and chief legal officer for both TCBY and its sister company Mrs. Fields Famous Brands LLC franchises. Novelty may have attracted the first customers, but the great taste has propelled the oldest U.S.-based frozen yogurt seller to over 440 domestic stores and more than 180 international stores in 20 countries. “From 1981 to 2010, we've always had the besttasting product out there. We know this and taste tests have told us this. What has kept us as the most healthy yogurt is a research and development team that I am proud to work with,” Ward asserts. “They are truly geniuses at what they do.” The variety of products developed by TCBY's “mad scientists,” as Ward affectionately calls them, distinguishes the franchise from competitors that have popped up in recent years. In addition to offering 30 to 40 mouth-watering flavors of its familiar soft-serve style, TCBY has developed a fantastic hard-packed yogurt that is similar to hand-scooped ice cream. Stores also now stock delicious fresh-made yogurts similar in texture to cup yogurts. In addition to new products, TCBY is working on new concepts, such as a self-serve model. Customers can create their own frozen treats, choosing the flavors, quantities and toppings.

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TCBY will experiment with self-serve yogurt in its two new company-owned stores in Salt Lake City, Utah. In the 1990s, American tastes shifted to highly indulgent frozen desserts, like Ben and Jerry's and Häagen-Dazs, but the dessert habits are changing again. The rise in obesity and the government's recent push for Americans to make better food choices has created a new opportunity for the frozen yogurt business. “It really has swung the pendulum back to a great, healthy alternative like yogurt,” Ward says. “And we're seeing a huge resurgence in yogurt.” The key to the success of TCBY – and Mrs. Fields gourmet cookies, which has also become a dynamic franchise backed by name recognition and worldwide consumer approval – is quality products. A crucial piece of providing high-

Food & Drink quality products is the full-service franchisee support, supplying as much help as needed. Franchisees have access to industry leaders in real estate, construction and

marketing, as well as an experienced legal team to ensure their stores exceed their customers' expectations. “We also have a world-class training department,” Ward says of Famous Brands University, which offers new owners nine days of learning the ins and outs of the business. The new company-owned stores offer trainees the chance to get invaluable hands-on customer experience. Another advantage is TCBY's stellar distribution department, which allows franchisees to set up shop wherever they like and still get product on time. TCBY is about to open a second store in Greece, and it recently signed a deal with a group in South Korea. “It'll be fun to see how TCBY does there; there are already some [American] companies there [in South Korea],” he says.

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Domestically, Ward expects the franchise to open 50 stores this year. The recent credit crunch slowed store openings in 2009, but TCBY searched out lenders who would finance new stores to propel growth in 2010. “Probably over half of the 50 franchisees didn't have to get outside lending,” Ward says. TCBY has much of the future already mapped out. Nontraditional locations are being actively explored and developed, which Ward credits to Rob Streett, the senior vice president of strategic development. TCBY and Mrs. Fields recently partnered with Six Flags to open locations within four amusement

parks this year, with additional expansion slated for the next six years. Several new locations also will open within another kind of park: Chase Stadium, the home of the Arizona Diamondbacks professional baseball team. For Ward, working with creative team members like Street or the R&D team of mad scientists make his 19 years and counting with the company fulfilling. “It's easy to work here because the rest of the team members are the kind of people you truly enjoy being around," he shares. The Country’s Best Yogurt and Mrs. Fields will continue to grow around the globe, satisfying customers through two highly flavorful franchises. n

Food & Drink

Heidi and Arthur Chocolatiers 'Chocolate Does Make You Happier' Produced by Sean Barr & Written by Anayat Durrani Anything you can imagine, Heidi & Arthur Chocolatiers can do in chocolate…and these guys know their chocolate. The father and daughter duo of artisan chocolatiers specialize in upscale chocolate confections. Self-confessed chocoholic, Heidi Caren, says it all began when she took a break from her full-time job as a realtor to take a chocolate class for fun. It was then and there, when her hands were steeped in a vat of the most obscenely decadent melted Belgian chocolate as she was hand rolling truffles, that she realized she had found her calling. She continued to take courses, read books and articles to learn everything she could about this totally incredible edible medium that was “real” chocolate. “I find it fascinating on so many levels. It is very up and coming as people are becoming more aware that not only is chocolate quite trendy and fashionable but that it really has so many valid healthful benefits. I love the history of chocolate is rich and dates back thousands of years when it was originally reserved for royalty and was seen by the Aztecs as a gift from the gods. It was later used medicinally back in the day when they did not know about those wonderful things called endorphins that are released in the brain when one consumes good chocolate.” It is the science and chemistry involved when creating confections

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that has to be so precise in order to render a beautiful piece of chocolate goodness. It is the whole process that is not only fascinating but gratifying when someone takes a bite of our chocolate and is taken aback when they realize that chocolate that is not your typical drug store fair, is a whole other food group and is an experience that far surpasses the term “snack.” At the time that Heidi discovered her new passion in life she was working full-time as a realtor and made chocolate a part-time hobby. During her first experience in the chocolate cooking class which happened to fall around the autumn and winter holiday season, she came home daily with pounds of these wonderful confections. She brought chocolate to all the holiday parties yet still had some much chocolate goodness left over that her father, Arthur Wartenberg, gave these chocolate delicacies to his business associates as holiday gifts. The feedback was unanimous and Arthur’s clients were so impressed that some of his them wanted to invest in her company that was yet to be launched. This feedback gave both Heidi and Arthur the encouragement to turn this hobby into something more lucrative. As Heidi started selling more chocolate than houses in a declining real estate market, the direction seemed obvious.

Goodbye real estate and hello chocolate! Heidi made her father an offer he could not refuse. The prospect of going into business with his daughter, as he reluctantly contemplated retiring from his wholesale toy business, was very exciting to him. He would get to spend lots of time with his favorite daughter (although he professes not to have any favorites) and he enjoyed the challenge of a new endeavor. And so, Heidi & Arthur Chocolatiers was born – an online boutique showcasing Heidi’s delectable creations. Heidi did her research. She found that 75 percent of buyers of chocolate products are women between the ages of 25 and 49, making upwards of $35,000 annually. Caren herself fell into that category. “Chocolate, it speaks to me,” says Heidi. We pretty much operated under the thought process of: “If it appeals to me, then most probably it will appeal to the majority of our clients.” She refers to her chocolate as “edible art” because she enjoys the creative process of designing the chocolates and inventing different and interesting flavor combinations. The company does not use any additives or preservatives and uses only the finest and freshest ingredients available. “I make confections. Everything somehow revolves around chocolate whether it be truffles, chocolate covered marshmallows that are made by hand in house, caramel or toffee,” says Heidi. Dipped “Sweetish” Fish have become quite fashionable as the age of nostalgia is making a revival. “I’ll do almost anything requested.”

In fact, she often test-markets them on her kids, friends and whoever she comes in to contact with to keep up with changing tastes and trends. Family has always been important to Heidi. She and her father, aged 76 but with more energy that most people she knows, make a great team. Business has been growing steadily. Heidi says she is “having a ball” working with her dad, who handles much of the business aspects and is the primary product taster as he has a most discerning palate. “I have been able to get to know my father on a whole other level from what I knew before.” Heidi & Arthur’s chocolates were chosen by People Magazine to participate in the 2008 Emmy Awards festivities in Beverly Hills, CA. Their clients range from the corporate world and small to midsize retailers, to hotels, caterers and restaurants. They also do weddings, work with florists, day spas and special events companies to assist them in making events people will be talking about for a long time to come. And of course, not to be discounted and always welcome at their factory, is the random wandering chocoholic. Heidi and Arthur invite you to visit their online boutique at www.heidiandarthurs.com to see for yourself what all the fuss is about! n

She sells dark chocolate almond bark, which she describes as the “little black dress” of the chocolate world. Of course it is donned with a very cool zen-like pattern to put her own spin on an old favorite. Then there is her chocolate dipped dried fruit, candied orange peel, and even dark chocolate dipped vegetable chips: sweet potato, parsnips, beet and taro…you could call it health food! Heidi & Arthur Chocolatiers have a lot to keep chocolate lovers happy. From their molded chocolates to truffles like Chinese 5 Spice and Spumoni, the flavor combinations are creative and inviting, like the Cold River Vodka and peppercorn ganache in dark chocolate, the hazelnut and cocoa nib truffles and even the whiskey ganache that packs an unexpected punch. “I can’t tell you how many people have told me they are ‘not really a chocolate person’ but they politely take a bit of whatever I am offering,” says Heidi. “That is my favorite customer as I convert I can’t even tell you how many of them; and to me that is very gratifying.” Heidi is always coming up with new creations. She says that she has so many ideas but not enough time in the day.

Food & Drink

One Natural Experience Promoting Health and Ecological Responsibility Produced by Sean Barr & Written by Amy Bonn The natural beverage company One Natural Experience (O.N.E.) is driven by two main goals: offer customers a healthier alternative to sports drinks and sodas, and conduct business in an environmentally responsible, sustainable way. O.N.E. World Enterprises, which does business as One Natural Experience, was founded in 2005 by CEO Rodrigo

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Veloso and is headquartered in Los Angeles, Calif. O.N.E. has the enviable distinction of having continually increased its size by 100 percent over each previous year. It has done this while staying true to its focus, which is to enlighten U.S. consumers regarding the health benefits of its coconut water beverage line.

Innovations in Health and Sustainability A defining characteristic of O.N.E.’s beverages is the ingredient list, which includes natural resources at one point considered waste products. Veloso notes that O.N.E.’s 100-percent coconut water offers consumers a highly hydrating drink rich in electrolytes and potassium, and provides farmers an opportunity to further profit from what was once merely discarded. In addition to generating the added value of coconut water, a byproduct of removing the coconut meat, O.N.E. has introduced similar beverages created from the açai berry, coffee fruit and cashew fruit. Veloso plans to win over consumers around the world through the superb taste and countless benefits of these oneof-a-kind beverages.

exponentially, due in part to the investment of Catterton Partners, a private equity firm. Catterton Partners has several beverage company investments and provided resources and expertise integral to O.N.E.’s success. The company has secured its supply of raw materials – the fruits that are the basis of the company’s beverages – in Asia and Brazil, having formed contracts with many of the world’s largest coconut farmers. The Pepsi Bottling Group Inc. distributes O.N.E.’s beverages, and Pepsico has invested in the company, as well. O.N.E. employs approximately 40 employees and distributes

Veloso’s business plan centers on creating a win-win situation for all O.N.E. stakeholders. Farmers earn more money by means of the newly established value from their crops. The company itself has affordable and easy access to a plentiful supply of raw materials used in its drinks. Current and future investors, in turn, will benefit from the stakeholder model behind this business plan. Clearly, Veloso explains, “The consumers will benefit, since we’re selling health.” A Visionary Plan for Success The success of O.N.E. has its origins in the excellent educational experience Veloso received. A Brazilian native, Veloso attended business school in both Brazil and Stockholm, Sweden. As a student, he drafted the vision of what would become the O.N.E. business plan. Veloso, drawing on his extensive international travel experience, saw the potential of introducing exotic, healthy fruits from tropical countries to the U.S. market in innovative ways. Veloso won business competitions in Brazil and Latin America with his plan for O.N.E., eventually relocating to the U.S. Veloso reports that his company is now the top coconut water brand in the U.S. Since its founding, O.N.E. has grown

Food & Drink its products in every state. The company has begun efforts to expand its reach to consumers overseas.

Americans will soon appreciate and enjoy the functionality and health benefits of O.N.E.’s line of beverages. This spring the company unveiled a new product, O.N.E. ACTIVE sports drink, with a coconut water base enriched with ginseng, catuaba and ginkgo biloba.

A Responsible Business Model In addition to the importance of forming solid partnerships with farmers and investors, Veloso cites social and ecological responsibility as company hallmarks. O.N.E. Coconut Water consists solely of its signature ingredient, with no additives. The company’s beverages contain no preservatives, as they are instead packaged in airtight Tetra Pak cartons. Veloso explains that these cartons, made of recyclable materials, are among the most sustainable beverage containers in existence. Looking to the future, Veloso’s objective is “to position O.N.E. as a global brand for healthy, better-for-you products. Now, with our partnership with Pepsico, we feel that we are closer and closer to achieving this vision.” Veloso hopes that all

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Beyond continuing to improve the company’s brand, O.N.E. aims to have an impact on consumers’ lives through its natural products. Veloso believes that the company’s dedication to both health and the environment will be positive factors for consumers, observing that “consumers are looking not only for the best products, but they are looking for the best company, as well.” Given the impressive growth of One Natural Experience/O.N.E. World Enterprises and its conscientious commitment to healthful consumer products, the company has the position to continue thriving. n

Trefz & Trefz Inc. A Model of Loyalty and Integrity Produced by Sean Barr & Written by Amy Bonn Trefz & Trefz Inc. was formed in 1970 in Augusta, Ga., by brothers Oren and Paul Trefz with the goal of purchasing fast food restaurants. Forty years later, the company employs 510 workers and owns 25 Arby’s franchise stores in Georgia, South Carolina and North Carolina. Trefz & Trefz has purchased several low-volume restaurants over the years and made them profitable. The hallmark of the company’s business strategy is treating employees and customers with honesty and integrity. This strategy, in part, is responsible for the sustained success of Trefz & Trefz since its founding. Oren Trefz, president and CEO of the company, cites positive and fair treatment of all members of his team as a major reason for the loyalty they exhibit. Of the company’s 25 stores, 16 of them are run by general managers with more than 15 years with Trefz & Trefz. The company’s director of operations has worked for Trefz & Trefz for the last 38 years. Overcoming Industry Challenges

instituting starting salaries at figures above the minimum wage and issuing paychecks on a weekly basis. The company meticulously documents all staff responsibilities in employee handbooks so job expectations are clear to employees from the outset. Additionally, as a strategy to improve employee performance and retention, the company administers quizzes to its hourly workers to monitor efficient work practices. For each passed quiz, the employee receives an incremental raise in pay. Trefz & Trefz also distributes bonuses to employees on the basis of honesty and loyalty rather than only on employee performance. Maintaining High Quality Trefz stresses the importance of good customer relations in running the company’s stores. Each one of Trefz & Trefz’s Arby’s restaurants offers customer comment cards. Trefz states, “I read every one of them. That’s how you correct any mistakes.” The company also guarantees that each employee always puts his or her best foot forward through its Toast of the Town program, which rewards workers for their positive customer relation ideas, politeness and manners.

Trefz recognizes the recent economic downturn and that sales often decrease during tough financial times. Trefz states that his company has worked on increasing efficiency as a way of sustaining profitability. Trefz & Trefz supply the restaurant employees with written, step-by-step instructions for most tasks to ensure that everyone performs consistently. Trefz expresses gratitude to the managers and staff members at each of the company’s restaurants for keeping individual store profits up by doing “a tremendous job of watching expenses.”

An additional tip that Trefz shares about maintaining profitability is the importance of excellent maintenance of company equipment and of the company’s restaurants themselves. Trefz & Trefz aims to keep its equipment in top shape. This strategy has paid off for the company in the form of continued financial success. Given the economic responsibility demonstrated by the company managers and employees, Trefz & Trefz is considering purchasing and opening a few more Arby’s restaurants in the near future.

Trefz reports high employee turnover is an additional challenge in the fast food industry. Trefz & Trefz handles this problem effectively, keeping turnover relatively low by

When asked about his favorite aspect of running the company, Trefz responds that he most enjoys “working on the little, tiny things,” the parts of his job that involve

Food & Drink collaborating with his employees on details to make his restaurants successful. Trefz has learned the importance of valuing employees and customers, and that happy workers lead to satisfied customers and a positive bottom line for the company. According to Trefz, “Service is more important than anything else, so you emphasize that. Watching our business grow has been a treat.” The company’s success has been recognized. Trefz reports that the company’s restaurants have earned a number of five-star awards from Arby’s. Beyond delivering quality service to its customers, the company has given support to the local communities that are home to its 25 restaurants. Trefz notes the company’s participation throughout the years with local high schools and organizations such as the Boy Scouts as examples of community involvement. As a result of Trefz’s proven business acumen, the company’s reciprocal investment in its employees and a dedication to the local communities. Trefz & Trefz will continue to prosper. n

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Kiolbassa Provision Company Supplying Texas with Smoky Flavor Produced by Mike Armstrong & Written by Molly Cohen Kiolbassa Provision Company, one of Texas’ largest distributors of smoked sausages, was built on the basic principle of offering highquality products. After cofounding and working for the Melton Provision Company, a cattle and goat slaughterhouse, Rufus Kiolbassa and his wife Juanita founded Kiolbassa Provision as a meatpacking company on November 22, 1949. And the company had immediate success among independent San Antonio grocers and grew its distribution on a reputation of minimally processed products that showcase choice Polishand Mexican-style sausages mixed with balanced spices. Building on Quality Change came to Kiolbassa Provision 10 years after its founding when Rufus began to have health issues. His son, Robert “Bobby” Kiolbassa, left one semester short of graduating from St. Mary’s University to take over the family company. With Bobby in command, Kiolbassa Provision successfully began expanding. In 1978 the company purchased slaughter facilities from Beef House Inc. to sell its own premium cuts of beef and pork. In the 1970s the Kiolbassa facilities found a home on San Antonio’s West Side and continued to increase product distribution throughout the local communities. In 1985 Bobby’s sister, Sandra, joined the company and two years later his son, Michael, came on board as plant manager, adding his several years of banking industry expertise.

Food & Drink The late-1980s was a huge growth period for Kiolbassa Provision. Expansion started in 1988 when the company began selling pre-packaged products through Handy Andy Supermarkets. One year later a local HEB Grocery manager began stocking Kiolbassa Sausage in five stores in San Antonio. After one year of super success, Kiolbassa Sausage was available in all local HEB Grocery stores. This was followed by penetration into Dallas/Fort Worth, Houston, West Texas and Rio Grande Valley markets in the early 1990s. In 1999 tragedy struck Kiolbassa Provision when Juanita died. The company restructured internally as Bobby became the CEO, Michael became president, and Sandra took over as vice president, while Barbara, Bobby and Sandra’s sister, was appointed the company’s secretary/treasurer. To solicit in its new markets, Kiolbassa Provision began television advertisements. In 2001 the company formed an alliance with San Antonio CBS affiliate KENS-TV. This new partnership showcased Kiolbassa every Friday during the summer in a feature program called “Backyard Barbeques.” Each week a lucky winner received a barbecue dinner serving Kiolbassa

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sausage for 50 guests. The event was then televised during a live weathercast. “Backyard Barbeques” became the marketing tool used to promote Kiolbassa Provision’s new all-beef jalapeño sausage.

Prompted by the success of this venture, the company began sponsoring WOAI-TV’s Kiolbassa High School tailgate sendoffs in 2002, airing television advertisements in Corpus Christi and the Rio Grande Valley. In 2006, Kiolbassa was named the official sausage to the Houston Astros baseball team and Six Flags Fiesta Texas theme park. The company also became a GO TEXAN member, which promotes the products, cultures and communities of Texas.

which also comes in a cheddar variety. The company also makes a Kiolbassa jalapeño beef smoked sausage, which has an additional cheddar-infused variation. This product is for people who like a little kick with their beef. Choosing the Kiolbassa Wisconsin cheddar cheese is another taste option. Furthermore, the company offers a Kiolbassa mesquite sausage, which is smoked for more than three hours. Lastly is a Kiolbassa Polish-style smoked sausage, a blend of beef and pork made in the longstanding tradition of Polish foods.

Continuing Diversification Now, according to Michael, Kiolbassa sausages are available throughout Texas at most grocery retailers. And the company is so proud of its products it offers a money back guarantee that consumers will think that “they are the best sausages that they have ever eaten!” Kiolbassa Provision has about 100 employees and utilizes “a network of folks we get supplies from and obviously they are very important to us,” Michael says of his repeat vendors.

And Kiolbassa Provision may be adding to this list soon. “We stay with what we have, but there are some things in development,” says Michael. Based on the popularity of its current products, the new items that the company creates will surely have an immediate hit. As more people try Kiolbassa Provision Company’s products – as they experience its promise of “real meat, real smoke, real sausage” – the company will continue to grow its offerings and active regions, bringing its reputation for compelling flavor with it. n

Kiolbassa Provision makes seven products. First is the chorizo Kiolbassa, a Mexican-style sausage made from all pork and spices. Next is the Kiolbassa beef smoked sausage,

Food & Drink

Bigelow Tea Company Big Things Come in Small Packages Produced by Sean Barr & Written by Tony Ware The Bigelow Tea Company was founded in 1945, when Ruth Campbell Bigelow set out to adapt a zesty Colonial tea recipe into a style she felt would appeal to the American palate for the long-term. It’s reported that her blend “caused nothing but constant comments,” which birthed the “Constant Comment” trademark under that the brew is still marketed to this day. This trademark has proved prophetic; Bigelow, now helmed by Ruth’s granddaughter and company president Cindi Bigelow, continues to elicit positive comments – not only for the way the company leads the market in launching flavored black teas, but also for the company’s efforts to reduce its operational impact.

has long held its corporate headquarters and considers its employees one big extended family. Additionally, the company holds dear its long-standing relationships with the same importers who have been providing the company with the country’s largest quantity of Sri Lankan teas for more than 30 years. With a firm backbone in place, Cindi has had the opportunity to not only do justice to the Bigelow legacy, but also to expand it greatly, especially in the last 10 years. “When you start reacting to problems in the market you’re too late,” advises Cindi. “You need to be aggressive, and prepare for a rainy day. Five to eight years ago I knew I needed to

In the 65 years since “Constant Comment” was introduced, it has certainly earned its iconic status as the cornerstone of a company that has grown to employ members of 330 families and generates $125 million in annual revenue. With three facilities – located in Kentucky, Idaho and Connecticut – Bigelow produced 1.6 billion tea bags in 2009. Those teas can come in any of 100 varieties – from orange peel and holiday spiced to probiotic-infused – but they all have one thing in common: they deliver. “I’ve been influencing the launches of teas for 10 years,” says Cindi, “and I’ve always said that anyone can launch anything, anyone can give the consumer the benefit of a name, and place a reasonable price on it. But what makes Bigelow Tea really stand out is the consideration put into making sure the customer receives the flavor and the experience promised.” A Recipe for Success “It all boils down to offering a consistently fantastic product,” says Cindi, using an extremely appropriate verb for a tea company. Indeed, fantastic consistency has been what Bigelow has brewed for decades. The Bigelow Tea Company – which includes Cindi’s father, mother and sister – is “like a sycamore tree, our roots run so deep,” says Cindi of the family’s commitment to Connecticut, where the company

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plant seeds, have additional gardens to compensate for when a garden wasn’t doing too well. You can’t react fast enough when a garden goes fallow. So those seeds are why we’re doing great now. “I’m speaking figuratively, by the way,” she laughs. “No, we don’t have some sort of secret tea plantations growing in reserve in case of emergency.” Following terms in sales and operations at Joseph E. Seagram & Sons and Kellogg’s, Cindi brought her MBA and expertise in team-building back to the family business. Starting full-time in 1986, she experienced every facet from the production floor to the president’s office, working her way up from cost accountant to assuming the reins in developing

tea lines committed to quality, respecting tradition yet simultaneously staying current. A key means to this end was Cindi’s push for holiday lines, the first of which launched a little over three years ago. “A lot of guys said it had been done and doesn’t work, there would be returned product, not profit,” recalls Cindi. “But I felt we could deliver what other companies hadn’t. So we had our R&D and blending teams working back and forth, offering checks and balances to make sure, for example, a ginger tea wouldn’t be solely geared to lovers of ginger, but rather could attract all tea lovers. “Our seasonal teas, initially brought to market in 2006, have outperformed each previous year,” says Cindi. “And we just released our Herb Plus line, which we’ve worked on for two years – that’s the average amount of time it takes to make sure we deliver on the taste, the aroma, and all the additional elements. Our goal is to always offer more than just an average cup of tea. And we never compromise. If I have a deadline but no good product, I will miss that deadline.” Of course, with over six decades experience with flavored teas, Bigelow rarely has to worry about falling flat. Tenacity being an inseparable part of her nature, Cindi has not only led Bigelow’s in-house development, but she has also pushed the company’s expansion into new channels. “Looking at every segment of business and seeing what it needs not only now but in the future, and preparing for it, that’s what we did,” Cindi narrates. “We figured out what segments we should be in and how we would stick with them. For instance, eight years ago we weren’t in the natural channel [for example, Whole Foods]. And five years ago we started aggressively to get into that channel. I believed that with quality products and [with] the right messaging those consumers would respond. And in a very short amount of time with not a lot of items on the natural channel shelves compared to in the grocery arena, we are No. 10 nationally, and growing in double digits. And everyone was telling me it wouldn’t work, or we’d have to come up with a new line. But why would I do that instead of give them our already top-quality items?”

“Whether the consumer requires it or not, we work on sustainability, [and we] work on reducing energy, because it’s the right thing to do,” emphasizes Bigelow. “We believe that as an organization we should reduce packing, make packaging more environmentally responsible, reduce waste wherever we can, everywhere we can. The greening movement is happening because it has to. Corporate entities around the world need to continue to make advances in this area.” Bigelow’s most public green initiative was the installation of 900 solar panels on the roof of the Fairfield, Conn., flagship plant, resulting in a major pollution reduction. But equally as important have been the moves that have resulted in everything from all office departments/ reports being paperless, facility light and electrical fixtures being refitted with timed and/or motion-activated on/off regulators, to packaging and shippers and tags being between 85- and 100-percent recyclable/biodegradable, among other efforts. On a more immediate front, Bigelow contributes to numerous fundraising campaigns in the communities that surrounding its facilities. And Cindi organizes company volunteers to administer the Bigelow Community Challenge, a yearly road race with tens of thousands of dollars in proceeds spread among families in need. “I never want to lose the compassion throughout this organization,” says Cindi. The company promotes sustainable farming as well. In 2003 Bigelow purchased and preserved the 127-acre Charleston Plantation on Wadmalaw Island off the coast of South Carolina; and now the company offers educational tours of the only working commercial, fungicide/insecticide/ herbicide-free tea garden in the United States, promoting the legacy of American Classic orange pekoe-style teas.

Promoting an Organic Growth Plan

On the business end, Bigelow Tea Company is working on export channel development, and has developed a partnership with the AriZona Beverage Co. to distribute ready-to-drink organic green teas, among other efforts. Throughout it all Cindi maintains plans to keep those positive comments on Bigelow Tea Company constant.

For Bigelow, quality extends from that of tea to that of life. And green as in environmentalism is as beneficial a flavor promoted by the company as is the green of oolong, jasmine, etc. Bigelow’s green initiatives go well beyond offering a comprehensive line of wholesome teas.

“It’s not just about selling quality tea bags,” reinforces Cindi. “It’s about delighting consumers, keeping quality people employed in a positive workplace, [and] transitioning our efforts naturally to develop rich partnerships [that benefit the Earth and the community].” n

Food & Drink

Good Health Natural Products Inc. Chewing Up the Better-for-you Snack Market Produced by Matt Duncan & Written by Jane Catoe Healthier, more natural options are available these days for just about everything from buildings to coffee to toilet paper. Now, go ahead and add snack foods to the list. But that won’t be news to Good Health Natural Products (GHNP). Its food division Good Health Natural Foods (GHNF) has been successfully manufacturing better-for-you and natural snack options for nearly 20 years. Salty Goodness Good Health Natural Foods makes its mark with healthier packaged snacks, primarily salty snacks, distributed primarily to the natural and conventional grocery channels nationwide. The company also distributes to chain drug

stores, independent grocers and fee stores, institutions of higher learning and airports. Customers can even order online at www.goodhealthnaturalfoods.com. “But our breadand-butter is really in conventional and natural grocery,” explains Mark Gillis, CEO of GHNP. “We have a number of products in Whole Foods, and many of the other supernaturals – Sprouts, Sunflower Markets, Earth Fare, stores of that nature.” Mainstream distribution includes SafeWay, Publix, Giants and many other well-known chains. The company has yet steered clear of big-box stores and shopping clubs. The company’s products may also be familiar: Old Glories Sweet Potato Chips; Olive Oil Potato Chips; Polenta Chips; Humbles Hummus Chips. If you’ve ever enjoyed any alternative chip, you’ve benefitted from GHNF’s ingenuity. It pioneered the veggie snacks industry years ago with its debut product, Veggie Stix. So, it’s not too surprising that GHNF is a leader in innovation and market share in this category. Good Health Natural Products, started in 1992 by a French entrepreneur, is a private equity funded entity helmed by Gillis comprised of two divisions. Gillis runs both – Good Health Natural Foods and South of France – out of Greensboro, N.C., with the help of 17 employees. The company’s South of France branch manufactures higher-end natural hand and body soaps, also with a focus on natural ingredients and national distribution. Though CEO for only a year-and-a-half, Gillis has been with GHNP for more than three years, and brings years of business experience to the table, including a focus at gaining market ground with Anderson, Bauman, Tourtellot, Vos & Co. Distribution Trumps Recession That could explain why GHNF, instead of losing market share during the recent economic downturn, actually grew. “In general, there’s been a trend in the last probably 5 or 7 years when it comes to snacking,” Gillis casually explains, “of consumers who are more interested or becoming increasingly interested in healthier-for-you and natural options. … So, retailers are trying to service this changing interest among consumers, and are bringing in more of these products to provide consumers with those types of options.” But those distribution channels are significant, to the extent

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that any slowdown was more than offset by the increase in distribution opportunities. In fact the downturn may have helped GHNF’s bottom line. “If anything, people are doing more shopping in groceries; they’re not eating out as much. That actually is beneficial to our business. If we get more traffic in a grocery store, it’s more likely that someone is going to pick up our product and bring it home with them. So we actually had a terrific year last year, the best year in our company’s history,” explains a pleased Gillis. As to how great a year, we can only speculate: Gillis doesn’t sell salty snacks and tell. But he says, “We’re not a small company. Our brand among natural snacks, according to the most recent syndicated data, was the No. 10 brand in the country in this category. Here are probably some brands that you’re familiar with: On that list are Kettle Brand Potato Chips, Frito-Lay Naturals, Orville Redenbacher popcorn, Popcorn Indiana – these are the guys who are ahead of us.” Factoring in Success With a rather large existing geographical footprint, GHNP keeps itself nimble and open to further growth by contracting

Food & Drink out its manufacturing. Gillis says, “It gives us better capabilities to do lots of different things. One of the things our business prides itself on is innovation. As an example, you’re not going to find another company that’s selling a hummus chip. And that was an innovation for us last year and it’s still a pretty exciting product that has a lot of growth potential. That’s the kind of stuff that you’re going to see coming out of our shop.” Whereas lots of people sell potato chips, GHNF makes theirs with 100% olive oil or avocado oil. Or out of sweet potatoes. The goal is to get these healthier options to the mass markets at an affordable price. Gillis says that’s a shift in strategy over the last couple of years that has really allowed the business to grow. Gillis hopes that people try GHNF’s products and say, ‘Wow! There’s really value to a potato chip made with a healthier-for-you oil that tastes good and that’s affordable.’ A Taste of the Future The company’s current focus is on solidifying distribution for its recently launched sweet potato chips and hummus chips. And, of course, developing new products. Gillis’s goal for the company is to gain even more market share with quality, innovative, healthier-for-you snack food products that consumers are seeking. Gillis is sure the combination of food trends and consumer demands, “Will help drive the size

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of the pie for companies that are in the natural marketplace. That’s kind of our pursuit.” If the past is any predictor, Good Health Natural Products is poised for further sweet – or is that salty? – success. n

Protein Alliance Passionate about Turkey Produced by Sean Barr & Written by Grace Glendinning Carl Wittenburg and Jeff Stauffenecker know their meats. In May of 1999, Wittenburg and Stauffenecker combined their years of experience in the protein market to go to work buying, selling and trading meat products across North America. The combined venture of these protein professionals is known as Protein Alliance Inc. Their Minnesota-based partnership arose out of a specific goal: to help represent a local Minnesotan turkey grower, Northern Pride, and to market its product for distribution. Protein Alliance soon added Cargill Foods and Willow Brook Foods to its roster of clients. Today, following

more than 10 years in the business, Protein Alliance is the exclusive sales representative for the Northern Pride brand and does roughly $50 million per year in trade. Protein Alliance has certainly found its niche in the protein arena, doing 90 percent of its trading in one area. â&#x20AC;&#x153;The typical trading house dabbles in all sorts of protien, where weâ&#x20AC;&#x2122;ve become kind of the turkey gurus,â&#x20AC;? jokes Wittenburg, president of Protein Alliance. However, the company does not leave the other meats out entirely. The remaining 10 percent of its trade is devoted to beef, pork and chicken. But turkey was an obvious way to go.

Food & Drink Birds of a Feather "I grew up in the turkey industry ... on a family farm. I like to say I've been in the business since I was able to walk," shares Wittenburg. In his professional life, too, Wittenburg expanded upon his turkey expertise. Before forming Protein Alliance, he served for seven years as the United States sales representative for Hybrid Turkey, the company that provides the genetic strain necessary for breeding turkeys to the turkey industry worldwide.

from the womb to the tomb," explains Wittenburg. "What we've concentrated on is sticking to turkey and being really good at it. And gaining the respect and having good character and integrity with our peers. We know our industry well and can represent it."

Stauffenecker also brought a hefty knowledge of the bird to the table. He came to the Protein Alliance partnership after many years as a commodity and whole-bird salesman for Jennie-O Turkey. Both men are proud associates of the National Turkey Federation (NTF), with Wittenburg's affiliation dating as far back as 1986, when he attended his first meeting. This specialty is a major point of pride for the pair. "What sets us apart is that we are very knowledgeable about the turkey protein industry. We handle all business ventures

And they do represent it. Protein Alliance sees product distributed to all 48 contiguous states, does a good deal of business in Mexico, and even trades a little with Canada — all with only four employees on the payroll. Selling the Bird Protein Alliance's buying group is made up of end wholesalers, food service accounts and distributors. It is a circular process that involves satisfying the customer, while taking care of the client. "Today's consumer is wanting more knowledge all the time. Therefore, they're demanding that from the retailer they purchased their goods from. And, therefore, those retailers are putting the onus back on the manufacturers to supply that data. And that's what we do. We complete the circle. You're constantly keeping your buyers informed of what's going on," explains Wittenburg. So, Protein Alliance isn't in the business of just taking orders and filling them. The company is tasked with providing data on the product – contents, safety, quality – by way of doing audits on the plants that produce it. Wittenburg attributes part of Protein Alliance’s success to its allies in the industry. He notes that the NTF stands apart from its peers when it comes to educating the different buyers and consumer groups. He observes that "they are good at stating the facts" about consumer advocacy and food safety information. He attributes the high level of communication to the small world of turkey folk. The close relationships in his market allow for real focus. Wittenburg concludes that it all "comes back to the unity ... [the turkey industry is] a pretty small family at the end of the day." In such a small arena, any particular business can fall

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under great scrutiny. So, the leaders of Protein Alliance have established a clear approach to its business model. The ideas at the center are integrity, service and passion. Wittenburg is determined to be truthful to clients, whether the news is good or bad. He insists, "The key is to be even keeled." Instead of dodging the truth in a tough situation, Wittenburg prefers to remain realistic, under-promise and over-deliver. "If you tell the truth, it wins every time," he says. Then it comes down to service. Protein Alliance is in the service industry. Wittenburg never loses sight of the fact that clients choose to call upon his expertise. So, he is consistently on the lookout for good partners that will work with him and appreciate the service his company can provide. Those relationships are his successes. He insists, "You don't bench mark it on money or sales." True to this approach, Protein Alliance works a lot with smaller companies. Wittenburg refuses to "run to the biggest guy on the block." He happily embraces the pun to avoid putting all his eggs in one basket. Wittenburg's passion for turkey is clear from the outset. He says it best, "Another key part of our life is that we're in a business that we have a passion for. So it's really not work." A Tough Meat Market Unfortunately, as in most business sectors, market changes and economic downturns affect the day-to-day. "Food is somewhat insulated from economy downturns ... but certainly it has been affected," observes Wittenburg. Protein Alliance has noticed the effects in a particular portion of its market sector. Wittenburg explains it this way: "The turkey industry ... really has two sides to the business model. It has a whole bird side, which is the traditional holiday [market]. It consumes about 25 percent of the industry's total volume. The other side of the business model is the meat, specifically the white meat ... you break it down into certain meat cuts ... with breast meat being the primary focus. And that's probably, due to the economy, what's been hit the hardest the last 18 to 24 months. It seems like consumers are buying down ... We've seen a build-up of inventory in the white meat sector of our industry."

forte is the whole body turkey, so the challenge remains to "educate our buyers as to what commodities are doing and then try to form pricing formulas where commodities are taken into account. Weâ&#x20AC;&#x2122;re always trying to minimize risk," stresses Wittenburg. Not Chicken about the Future Protein Alliance is doing big things, regardless of the difficult economy. Recently, it worked closely with American Foods Group, a large, national beef chain, to develop the Great American Turkey Burger. Protein Alliance took about 18 months from concept to manufacturing for the retail sector. The product, in stores now, is a frozen, two-pound pack to add to American Foods Group's Great American Hamburger line. The concept and launch is a great source of pride for Protein Alliance. Flying high on the successful turkey burger project, Wittenburg's plans for his company are about consistency. He plans to continue to focus on turkey as its core protein. His goals are always to minimize risk and maximize return for the growers. Protein Alliance will continue to do that for Northern Pride and for the rest of its clients. A major issue at the heart of Wittenburg's goals for the company and the country include establishing the United States as a world leader in agriculture. In recent times, Brazil has taken over as "the big stick" in the agricultural industry, according to Wittenburg. He does not believe that "our homefront is properly educated" on the potential of the U.S. protein industry. "We're in a global economy ... within the United States we have our own little tug of war going on, whether we should be known to the world to feed them or not." There is no question for Wittenburg. "We need to be recognized as a world resource." Again, he is proud of the influence the NTF is having on the politicians concerning issues related to this struggle, but he acknowledges that it is a long-term battle. Wittenburg is most proud of the reputation and authority Protein Alliance has established in the turkey market. He plans to extend that influence for the betterment of the entire U.S. protein industry. He hopes customers will forever say, "We understand you're the turkey guys. When [we] want something done, [we'll] come to you." n

To combat the financially cautious consumer, Protein Alliance is working with its buyers to adapt. One method is to offer a "roast" option, which is a 60/40 mix of white and dark meat, rather than the typical "deli" option. With that, the lower-priced option becomes the daily product for the consumer, and the shelves empty again. Wittenburg is quick to note, however, that Protein Alliance's

Insurance

Morrow Insurance Group Staying Committed to their Industry Produced by Cathi Sachs & Written by George Furukawa

It is reassuring to know that in these uncertain economic times, rife with businesses downsizing or filing for bankruptcy, Morrow Insurance Group â&#x20AC;&#x201D; a Tampa, Florida company that has embraced the mom-and-pop mantra for

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success since 1905 â&#x20AC;&#x201D; continues to provide its family of more than 2,000 clients with premium, personal, quality service.

The company provides its clients with a range of flexible coverage for any business, large or small. This includes property, commercial general liability, worker’s compensation, umbrella, as well as full-service personal lines and employee benefits. Morrow Insurance Group manages a computerized rating system that compares rates of competing insurance companies for identical coverage so the company can provide the best rates for clients. “The company's success is related to good customer service,” says Lynn Olney, president and CEO of Morrow Insurance Group. “We like to know our clients, and we work with them individually…we take care of our customers one at a time. We're building our company. We've tried to focus on the individual customer, whether they spend $500,000 or $500. They get the same consideration,” Olney explains.

that are good with the market conditions in Florida,” Olney states. Olney has been in the insurance industry for 30 years. “We're going to be here. We're not going anywhere,” declares Olney. “We're committed to the industry and to insurance. It's hard to say what's going to happen tomorrow, because who among us can predict? The strongest thing that we have to offer is that we're dedicated and committed to our industry, wherever that might take us. n

The company's niche markets are small- to medium -sized businesses. Olney is confident there is a place for Morrow Insurance Group in the future. Olney notes that people are moving away from interfacing with large conglomerates, because those businesses are unable to provide personal, individual service. “Go to a bank, and they won't have any clue who you are,” says Olney. “Come into our office and we'll know who you are. We're not a large company. We have 14 people on staff. The large companies have had layoffs. In the past year or so, I think everyone has had to change the way they do business because of economic conditions. I'm proud to say that we haven't laid off anyone when a lot of my peers in the industry have had to cut back. We haven't been given raises, but we have our jobs. There's a place in the industry for a small company,” elaborates Olney. Morrow Insurance Group, an independent insurance agency, is strategically aligned with insurance companies that best serve the needs of clients. The company's premium billings are in excess of $10 million. “We have several regional carriers that are unique to Florida, in that they are able to deal with the Florida market. As you know, the Florida market is different than these in almost every other state. Of course Louisiana might begin to see some of the wind issues that we deal with, but we have several regional carriers

Insurance

VGM Insurance Staying Ahead in Challenging Times Produced by Cathi Sachs & Written by Robert Brown VGM Insurance has responded stoutly to the health care reform that has dramatically changed its industry, and the risk has paid off for its constituents. Just as Congress passed health care reform, John Spralge, then president of VGM, explained exactly what a home medical equipment dealer is and how VGM is uniquely situated to make a difference in the industry. "We are a service organization,” he said. ”We help medical equipment dealers make a better profit to compete with the nationals." VGM Insurance is just one part of Van G. Miller, Inc., an organization of over 400 employees with a variety of companies specializing in products and services as varied as website development, home prosthesis support, and financing. VGM lobbies in Washington on behalf of home medical equipment dealers. The company has made the most of a challenging political and economic situation, resulting in growth over the last six months since health care overhaul passed while many of its competitors have struggled. “It’s complicated,” Spragle says. “When I was younger, you didn’t spend that much [on insurance].” He went on to explain that many simple, reasonably priced policies were available which offered enough basic coverage that if you got hurt it didn’t put you in a financial bind. But now similar policies are a lot more complicated, and VGM can

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help small businesses manage that complication. VGM has worked fast to update its services. Concerned that the smaller businesses they represent in the health care industry would not be able to compete with larger businesses as a result of some aspects of the bill — particularly the form of competitive bidding they refer to as "suicide bidding" — VGM Insurance used the shifting tides to the advantage of its constituents. "The government required one of our customers to carry a fraudulent Medicare bond, and we really weren’t for it, but we did gear ourselves up to help them and I think we’re now probably one of the largest providers for that bond.” Because VGM Insurance is a smaller operation, employing a staff of 24, the business is able to work directly with their customers. “We probably go a step further,” Spragle says. “We handle the claims in-house. We issue the policies. We provide all the service that an insurance company would, except we use somebody else’s paper.” VGM Insurance is usually able to provide quotes in a matter of minutes, and with the wide variety of niche services VGM offers, it often keeps its customers "in the family." VGM was founded 20 years ago as a business of one person. Now, a complicated family of businesses, offers a unique model of how to keep a business personal, cost-effective and

nimble, despite facing bureaucratic challenges attendant to rapid growth. Spragle recently retired, handing the company over to Tom Jones, the man who brought him into the industry 25 years ago. The business has continued on its upward trajectory. VGM and VGM Insurance continue to lobby on behalf of its constituents to shape the industry in a way they think is most effective for everyone. The companies have continued to grow in the past six months despite the recession and the chaos which has enveloped the industry.

Education

Anna Maria College Educating Students to Give Back Produced by Mike Armstrong & Written by Molly Cohen Anna Maria College (AMC) is a small, Catholic liberal arts college in Paxton, Mass., founded in 1946 by the Sisters of Saint Anne, a religious community of women whose mission is to serve the common good through better access to education and service to others. These directives still thrive on campus today.

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When the Sisters contemplated starting a college, they recognized the need for women to receive access to Catholic higher education in Central Massachusetts, which at the time had two Catholic schools dedicated to educating only men. Soon to celebrate its 65th anniversary, AMC is no longer a small womenâ&#x20AC;&#x2122;s college; it is a thriving co-educational college-

“Prospective students come to my office and I say, ‘If you want to go to college and hide, don’t come here,’” says Calareso. “Anna Maria provides an environment that allows students to shine in and out of the classroom with the appropriate level of support systems in place to ensure that they graduate on time.”

community of learners and scholars who are committed to higher education and service to others. “Our focus is on working with students with interests in professions that will ultimately serve the needs of the community,” says Dr. Jack P. Calareso, the College’s president. “Our mission remains steadfast and committed to providing students with the knowledge, skills and values they will need to lead successful lives.” In addition to its founding mission, AMC promotes an environment of personal attention and accountability.

AMC has approximately 300 graduate students and 1,300 undergraduate students, around 40 percent of which are first generation college students. As a small school, Calareso describes AMC as the perfect place for that demographic. “The hard part for first generation college students is that they don’t have parents at home who have been to college, so they come here and it’s all new,” says Calareso. “We cater to a student who is bright and talented, but needs a little extra attention.” The college has 52 full-time and 143 part-time faculty members and an operating budget of $22 million to help meet these students’ academic needs. Almost all classes are held on the 190-acre Paxton campus, though AMC has an instructional site in Worcester for graduate programs. The only on-campus resources that are outsourced are dining, maintenance and the bookstore. However, Calareso admits, “If the economy and banking stay the way they are, we may explore outsourcing housing.”

Education Putting Plans on Hold Despite the recession, AMC is very proud to note record interest and enrollment. “We had our largest freshman class last fall,” Calareso states. AMC exploded with students since Calareso joined the institution, but with that growth came growing pains. AMC is only capable of housing 600 students on campus. “We need beds, because next fall we could have about 750 students on campus, so we have some challenges,” Calareso recognizes.

learn. The school has also added masters programs in public administration, special education and emergency management. Calareso constantly assesses AMC’s current programs in attempts to become more competitive. One of Calareso’s other big initiatives is expanding AMC athletics. The school added a football program and is now in the process of getting a marching band. Other additions were men’s and women’s tennis, lacrosse, golf and cross country. “We’re thinking about hockey, but we have to deal with the facilities issue,” Calareso adds. AMC built a new athletic complex, which includes a field press box, for the new sports.

Increasing enrollment is central to the College’s strategic plan. “In order for the College to grow, resident hall capacity must increase,” says Calareso. This is due to the fact that the College is located several miles from an urban area. “With the “It’s very tough economic challenges in this country, financing new buildings has been more to tell a first of a challenge. Sadly the College has generation had to artificially suppress enrollment growth until a new residence hall is student they can’t opened in Fall 2011,” Calareso explains. Overcoming economic issues remains as AMC’s biggest challenge. “It’s very tough to tell a first generation student they can’t afford tuition, so we’re working hard to increase financial aid and keep our costs down,” Calareso explains. Expanding Beyond Tradition

afford tuition, so we’re working hard to increase financial aid and keep our costs down,” explains Dr. Jack P. Calareso, Anna Maria College president.

Those who do attend AMC have numerous programs from which to choose. One of the school’s largest programs is criminal justice, which is used as a springboard for a variety of other studies, such as law enforcement or law school. Other popular programs include education, nursing, performing arts, business and social work. Fire science is a program for students going into service, whether in community fire departments or safety and security areas. Two of the more selective programs at AMC are music therapy and art therapy. Graduates in these unique professions could potentially work in healthcare facilities using music or art as a way to help sick and/or elderly people recover, or to help children with emotional issues improve their quality of life. “It’s a small field, but many of our graduates get hired into a consortium of healthcare companies to spend time at each of their locations,” Calareso shares.

AMC launched online programs in January 2010 in an effort to add new mediums from which students can

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Additionally, the school added two new residence halls on campus. During this process AMC has implemented several inititiatives to become more sustainable. Starting small, AMC has emphasized recycling and cut down on paper usage. “We also use solar energy as much as we can; it runs our sewer lines,” Calareso notes. “Now we’re working toward wind power.” On a larger scale, AMC signed a contract with Siemens to upgrade buildings and make the school more lightefficient. The school is also converting oil burning furnaces into a wood pellet system. All of these steps are part of the strategic plan to grow the institution exponentially. “We believe we need to expand our current size to 3,000 traditional and nontraditional students with more than half of the undergraduate population living on campus, but we can’t grow enrollment without staff, buildings and resources to support institutions,” Calareso explains.

Over the next five years, AMC will expand slowly and renovate its campus to meet the requirements for larger enrollment. Between Calareso’s passion for the school’s mission, the exemplary programs available to students, and the expansion plan, Anna Maria College and its students will continue as an institution of academic quality, giving back to the community for years to come. n

Cochise College Preparing Students for Soldiering Through the Real World Produced by Mike Armstrong & Written by Molly Cohen

Seven months after becoming the president of Cochise College, Dr. James “JD” Rottweiler is already confident of the school and proudly promises it is “a cost effective way to gain a higher education.” Founded in 1962, the school is only a couple years away from celebrating its 50th anniversary in 2012. As the third largest community college in Arizona, it has two full-service campuses (one in Douglas and the other in Sierra Vista), as well as four outreach centers. “We cover a very large area,” Rottweiler explains. Rottweiler came to Cochise after serving as the executive vice president of academic services at Central Wyoming College for many years. Over his 20 years of experience in the industry, Rottweiler developed an understanding and appreciation of what it takes to make a college successful and useful for its students. “We have great collaborations with state schools and regional universities,” he shares as an example. “Sierra Vista and Douglas are also home to University of Arizona South, a branch campus of the University of Arizona, so students can complete their bachelor’s degrees without leaving their community.”

Upgrading to the 21st Century The Sierra Vista and Douglas campuses are about 45 miles apart, offering different programs based on their location.

The Sierra Vista campus, located near Fort Huachuca, offers soldiers stationed there easy access to the military intelligence, unmanned aerial vehicle and high-tech fields of training available. Meanwhile, the Douglas campus has an aviation school instructing students in courses from ground school to pilot using its fleet of 14 planes.

Education Rottweiler takes pride in the opportunities Cochise provides for students, including programs that help facilitate various post-graduation opportunities. The school is a “comprehensive community college, providing programs that lead directly into the workforce, as well as college transfer stuff, preparing students through their first two years to continue on,” says Rottweiler.

Cost-effective Changes

Rottweiler has been able to enhance the college’s facilities as enrollment at Cochise, which is currently at 6,000 traditional students, grows. The school spent $50 million on expansion efforts for both campuses and “turned around our learning environment to meet 21st century expectations full of gadgets and toys,” he says.

Despite these adjustments, Rottweiler jokes that “when you get reduced funding is when you get increased enrollment,” so the school is trying to be as efficient as possible in order to meet student needs. Rottweiler is often kept awake thinking about how to expand business in a fiscally responsible manner. “I think services from community colleges never have been more essential for our community; we’re faced with challenges and a dwindling of resources, so we’re doing all we can with what we have,” he says.

Cochise has 100 full-time and 200 adjunct faculty members teaching the students how to use these new technologies and effectively preparing them for the next step, whether it is continued education, service, or a potential job. Cochise has a partnership with Sodexho to provide the campuses with food service and Barnes and Noble handles the bookstore functions. In total, Cochise has a $36 million operating budget.

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Despite the growing enrollment, Cochise faces similar economical challenges noticeable throughout the state. “Arizona is going through significant financial situations [so we’ve had] budget reductions over the last two years,” Rottweiler shares.

The Douglas campus recently completed a new science building and career technical education building, both stateof-the-art facilities in that area. Additionally, the campus refurbished some of its buildings that were originally completed in 1964. The refurbishment creates a quality learning community, based on Rottweiler’s belief that “students learn best when connected to each other and faculty.”

Meanwhile, the Sierra Vista campus’ upgrade included an addition to the science building and the completion of facilities for the career technical education building, welding lab and avionics for construction trades. “We have a learning commons which brings together a computer lab; tutoring in writing, reading and math; and it’s created in an environment where students can learn together and independently,” shares Rottweiler. Sierra Vista is a commuter campus, so an upgrade to the student union gives students a place to hang out before and after class. Meanwhile, the Douglas campus has about 120 students who live right on the campus. In an effort to reduce energy costs, ground was recently broken on the Douglas campus for a solar field. Based on the success of this new energy alternative, the Sierra Vista campus might benefit from similar features as well. With all of these innovative efforts and changes in place, Rottweiler sees Cochise heading toward creating new programs in sustainability, as well as completing the master’s facilities plans. With Rottweiler’s determination to bring cost-effective changes to the school, Cochise College will continue to educate students on becoming influential members of the workforce through its myriad of growing and improving course offerings and realworld applications. n

Education

Bennington Marine The Best Pontoons on the Market Produced by TaMeka Marshall & Written by Amy Bonn Top of the Line Model Now, if you’re like me, and you’ve spent some time on a pontoon boat, and you know they’re not all equal. Robert Stephens of newboats.com enthuses over the 2575QXi model, “Simply put, this is one of the best overall boats we tested. It would be easy to write a page about the performance alone. Our boat was rigged with the super power of a Yamaha 350 V-8 outboard. We went from 0 to 40 mph in less than nine seconds. With this setup you have a boat that literally can't be heard at idle, and can then be seen doing 47plus mph at top end. The 2575QXi we tested could handle the biggest outboard on the market because of the unique elliptical center tube, which is 25 inches tall and 32 inches wide, leaving only narrow gaps between the tubes and creating more flotation for a huge motor.”

A couple of years ago, a friend of mine built his house on the Gulf Coast of Mississippi. He realized shortly after moving in that he needed a boat for fishing, but one that would also accommodate a large numbers of his friends. He also had to factor, the shallow waters of the bayous that line the Gulf Coast. Enter in Bennington out of Elkhart, Ind., and its top of the line pontoon boats. Bennington, founded in 1997, is one of the undisputed leaders in the luxury pontoon industry. Only five years after starting production, Bennington won the country's most prestigious customer satisfaction awards from both the National Marine Manufacturer's Association and JD Powers& Associates. Bennington has placed either first or second with JD Powers since the independent research firm began recognizing pontoon manufacturers in 2002.

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Bennington already had some of the highest customer satisfaction scores in all of boating when it introduced the "Q" series in late 2006. They literally started from scratch to develop this model. The furniture has pillow-top seatbacks, ostrich-skin accents, and soft-touch vinyl that feels like chamois. The seats in the bow incline to a semi-lounge position, and storage is accessible via hatch doors at the seat bases. They also raised the helm for a better view over the long bow, which is so long and elegant that it looks like a furniture showcase. It's all framed by 2.5-inch-wide flat rails (like you'd find on a porch) and corrugated polycarbonate panels. This is the stuff used to make bulletproof glass. We've seen the panels hit with a mallet, and not dent. Call it a line of defense for one of the best overall boats of our tests. Who should buy it: “Those who want the best layout, best materials, and the capability of rigging with the most

powerful outboard motor on the market. The 2575QXi stands apart for reasons that are both subtle and obvious.” The vital stats on the 2575QXi are: • • • • • • • •

Length: 25" Beam: 8'6" Dry Weight: 2,649 lb. Seating/Weight Capacity 13/1,810 lb. Fuel Capacity: 33 gal. Max HP: 350 MSRP (w/ Yamaha F115): $45,059 NMMA Certified: Yes

A lot of companies will cover their suppliers’ products, but if one of them should break down, they tell you to contact the supplier directly. Bennington eliminates that hassle, giving customers one person to deal with. It’s pretty easy to see why Benningtonhas come to dominate the pontoon boat industry in a short period of time. You know when JD Powers & Associates has awarded a firm a #1 or #2 rating for the last eight years in a row, it’s a firm you want to do business with. n

Outstanding Customer Service Bennington’s commitment to its customers is apparent when considering the terms and conditions of its warranty. It’s one of the few warranties with small print that isn’t detrimental. New owners get a five-year, no questions asked warranty from stern to bow. Literally everything is covered. The best part of this warranty though is that it’s not pro-rated, which means it’s the same warranty on day one as it is on the last day of the warranty. The warranty is transferrable as well, adding thousands of dollars to the resale value of the boat.

Spotlight

Del Sol L.C. Harnessing the Sun to Create Smiles Worldwide Produced by Sean Barr & Written by Molly Cohen Del Sol L.C. was created in 1994 with the goal of creating fun, joy, smiles, and memories for everyone under the sun. “We produce products that change color in sunlight. The sun’s UV rays activate the dyes and inks in our textile designs and plastic goods (Frisbees, hair accessories, nail

The company’s current President, Jeff Pedersen, took on the position in 2003, but he joined the company in 2000 as its executive manager at the Del Sol location in St Maarten in the eastern Caribbean. “His father was one of the original cofounders of the business. Jeff is now the acting CEO and President of the parent company, Pedersen Worldwide — the holding company for Del Sol and its sister brand, Cariloha, which is a brand centered around bamboo-based products. Jeff grew the company from 2003 to where it is today,” says Brady.

Making Memories out of Sunshine With Pedersen’s guidance, Del Sol strives to make each of its products have a ‘wow’ guarantee. “If people don’t say ‘wow’ or something like that, we’ll give them their money back, but so far we’re keeping jobs and not giving money back because without fail when people see the products change from one color to another in the sunlight they always say ‘wow’,” Brady assures. “In our stores we have custom patented sun lamps, we call them sun stations, where customers can try out the product inside because these lamps emit UV rays. When they step out into natural sunlight the clothing changes faster [in raw sunlight].”

polish, jewelry, flip flops) so when you’re outside in the sun those products change to one color and when you’re inside and not in the sunlight they change to their original color,” explains Scott Brady, associate vice president of communications at Del Sol.

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Del Sol is based in Sandy, Utah, a suburb of Salt Lake City, and has an international footprint. “We have more than 130 retail operations in 23 countries worldwide,” says Brady. “We wanted a product line to make people smile. Every time someone put the product on for the day and walk outdoors with a big smile on their face and they remember the vacation where they purchased the product, whether in San Antonio, Texas, or Myrtle Beach, S.C. — it’s the memories, the smiles, and the joy of it all.”

It takes a large employee base to make these goals come true across the world. In the corporate office, distribution center, and printing facility in Utah, Del Sol has about 102 employees. Worldwide, Del Sol has 865 employees. As for annual revenue, Del Sol generates between $35 million and $45 million.

organic. We’re working closely with the EPA and OCIA and have replaced our oil-based foam packaging for nail polish with recyclable boxes. Our retail bags are made from recyclable plastics. And restricted substances are universally banned in our production processes,” Brady gives as examples.

Annual revenue is reflective of how well Del Sol is doing despite the recession. “We’re up this year 50 percent over 2009 and in 2009, we finished 20 percent above 2008. So we continue to grow largely because we’ve explored new revenue opportunities, and are looking at new locations to open stores, new retail locations where we don’t have a presence,” Brady shares. “We’ve opened 24 new retail stores in the past 24 months, and all have been strong accounts. These are standalone Del Sol stores that are selling Del Sol products exclusively.”

Soon Del Sol will be introducing new products to its production line. The company is looking into a few of items — one is rash guard shirts for children and adults to wear in swimming pools or at the beach in the water. “They’re becoming very popular right now. Just throw one on and it protects your skin from the sun. The design on the rash guard changes color in the sun,” says Brady.

To look for additional retail options, “we’ve also begun the charge to go into wholesale accounts; we attend trade shows in the U.S. and Canada and offer products to other resellers, specifically Walgreens. They’re selling Del Sol hair accessories, nail polish and jewelry in 267 Walgreen stores in Florida and another 344 in California. Those opening orders have been enormous and brought in a lot of additional revenue into the business,” Brady shares.

Another new product is “an iPod cover that changes colors in the sun. And sunscreen — on the actual bottle of sunscreen there will be a little information on it. You’ll know it’s time to apply sunscreen when you see it change color in the sun,” Brady says. In addition to new products, Del Sol hopes to expand geographically. “There are so many different locations in Europe on the horizon where we want to put in Del Sol stores,” Brady adds. “We’re investing $500,000 in product development. There is a lot of room for growth and expansion and retail development as well.”

Changing Opportunities Increasing sales has not been a problem for manufacturing since Del Sol handles that process in-house. “The ink and color-changing dye we call Spectrachrome® Technology is manufactured in-house as well as nail polish. We do all screen printing in-house on shirts and our tote bags and hats are embroidered here,” Brady says. “The fabrics and some plastics are sourced to Asia. We have a partner in Hong Kong called Del Sol Asia. They provide a lot of raw materials, and we do a lot of networking and sourcing with other factories in Vietnam, India, Taiwan and China as well. We have some factories in Mexico and in California.”

Even though it is a relatively new company, Del Sol has been a success story since it was formed. And Jeff Pedersen’s leadership will continue that story, allowing Del Sol to grow each year, thanks to new retail opportunities and a

Del Sol works to make its manufacturing processes as green as possible. “A lot of the things we do are sustainable, and as far as our green footprint, we’re not perfect but try to do our part. All of our Spectrachrome® inks and dyes are

Manufacturing

Delta Hi-Tech Versatility Keeps Delta Hi-Tech Strong through Recession Produced by TaMeka Marshall & Written by Jarrett Oakley The U.S. manufacturing industry is in a state of crisis. The modern economic era has been defined by retracted U.S. durable goods manufacturing, and a runaway landslide in the construction market that contributed to the 2.4% downturn in the overall GDP in 2009, according

Delta HI-Tech, and its sister company, Delta Fabrication, are two precision manufacturing companies that have been the regional industry leaders in milling, sheet metal fabrication, laser cutting, and welding for over 20 years. Delta Hi-Tech and Delta Fabrication offer a host of products engineered by the latest advancements in machining

to the U.S. Bureau of Economic Analysis of the Department of Commerce.

technology in their state-of-the-art 60,000 square foot facility.

Yet you wonâ&#x20AC;&#x2122;t hear complaints from the manufacturing professionals at Delta Hi-Tech and Delta Fabrication, based in Chatsworth, Calif.

Employing 120 people specializing in CNC machining of complex components and sheet metal fabricated assemblies, the Delta Hi-Tech and Delta Fabrication family

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has weathered the economic recession to produce annual revenues continually exceeding 30% annual growth. “I attribute it to us being so versatile,” described Delta HiTech and Delta Fabrication President Joe Ostrowsky when asked about his company’s remarkably stable revenue flow in hard economic times. “We really are a one-stop shop in a lot of areas of manufacturing, such as screw machines, milling, and sheet metal fabrication. People in the industry can appreciate it,” Ostrowsky continued. Along with its versatility, Delta workers and executives have the forethought to innovate its production and machining equipment to span their companies’ scope of work into new sectors such as medical, military defense, and aerospace. In terms of a supply chain, Delta Hi-Tech and Delta Fabrication keep little in stock, and instead define their market value based on custom order-to-build processing from prototype to full production.

supported the F-22 Program by supplying normally longlead time items in 10 days. To that end, Delta’s employees worked 3 shifts, 7 days a week. By their efforts, Delta restored the F-22 frame requirement back to ‘on schedule’ status.” Warren Buffett once said that “in the business world, the rear-view mirror is always clearer than the windshield.” Delta Hi-Tech and Delta Fabrication see the U.S. recession in their companies’ rear view. While the economic future of the U.S. may be uncertain, what is certain is that the professionals of the Delta family are committed to fulfilling the needs and desires of every company with which they do business. Through their versatility, innovative employees, and proven professional track record, Delta Hi-Tech and Delta Fabrication have become the leaders in the precision manufacturing industry. For additional information on Delta Hi-Tech and Delta Fabrication, please visit: www.deltahi-tech.com n

Mainly utilizing this custom shop business model and outset bidding processes, Delta Hi-Tech and Delta Fabrication have garnered contracts from some titans of the industry, including several prime defense contractors and Fortune 500 companies. Luring large and small portfolio companies alike, the Delta family strictly adheres to sound business practices and AS9100 quality assurance policies that, along with its ability to innovate during difficult times, are the secrets to their business successes. Since 1985, Delta Hi-Tech and Delta Fabrication have upheld the highest levels of efficacy and excellence by employing professionals that are vested in their clients' successes. “At Delta, all of our business relationships with customers, employees, vendors, and the community at large rest on a foundation of integrity and trust,” explained Ilan Ostrowsky, Vice President of Delta Hi-Tech and Delta Fabrication. He continues to explain that “our success is dependent on each individual's commitment to those enduring timeless values.” Testimonials support President Ostrowsky’s charge for company commitment. In a letter to Delta Hi-Tech, Bobby Milton, buyer for Phantom Works Supplier Management, and Gary Graves, manager of F-22 Systems and Instrumentation at Boeing, described the company’s dedication: “Delta Hi-Tech is a…company whose capabilities fully

Spotlight

HobbyTown USA The Business of Having Fun Produced by Hanim Samara & Written by Deborah Wallace retail hobby franchise in the world. Divided into eight geographical regions, it boasts 165 franchises in 40 states. Its first international franchise will open in Australia in 2011-2012. Continued expansion, both within and outside the U.S., is a key objective of the company’s short- and mid-term strategy. HobbyTown USA’s product line is unique in its mix of offerings. The majority of hobby companies specialize in one or two select products, such as model railroads or radio controlled electronics, and then may carry a smattering of additional products. HobbyTown stands alone in the retail franchise market because of its unsurpassed mix and depth of products. Whether an enthusiast is looking for radio control products, anatomical models, strategic games, or science kits, HobbyTown offers every imaginable product and accessory. Clicking on the Radio Control tab on HobbyTown’s main website brings up a staggering 6,871 items for radio control cars and another 3,572 items for radio control planes. The company’s President, Bob Wilke, knows that HobbyTown’s massive product line has contributed significantly to its rapid growth and continued success. He also knows that relentless attention to customer service and franchisee satisfaction is a fundamental underpinning of its growth and performance.

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HobbyTown’s franchisees have unusual latitude in managing their locations. Wilke explains this aspect of the company’s strategy: “Flexibility for the owners allows them to capitalize on their own enthusiasm for the products they’re passionate about. If they have a particular niche interest, they are free to build their franchise around that.” The company also provides excellent infrastructure support for all its locations. Franchisees know they can count on corporate for marketing, accounting, site design and lay out, product distribution, a proprietary POS system, and management of its constantly changing database of orders, products, and parts. This level of support allows them to

focus on what matters most to them – retaining their customers and stocking whatever those customers want. One aspect of the business that Wilke is particularly enthusiastic about is HobbyTown’s recent entry into the e-commerce space. “Just about everything we’re working on now is Webrelated, and every franchise either has or soon will have its own website. We’ve also built a social networking site, HobZob.” The full-featured, interactive site provides a space for hobby enthusiasts to publicize and register for events, and also serves as a forum for exchanging information, advice, and personal stories. In addition, after a three-year hiatus, the company has just re-launched its magazine, Hobby Outlook, as an online publication in an effort to attract more traffic to its websites. HobbyTown has been quick to maximize its e-commerce business. Its websites are not final destinations but launching points for the hobbyist community. The recently created Hobbyist of the Year award, for example, gives hobbyists yet another opportunity to share their creativity. While HobbyTown USA is all about having fun and connecting like-minded hobby enthusiasts, it has also proven to be an exemplary corporate citizen. HobbyTown USA is a member of the Veterans Transition Franchise Initiative, or VetFran as it is known, a nonprofit established specifically to help honorably discharged veterans transition to civilian life by encouraging franchise ownership through financial incentives. As a participant in this initiative, HobbyTown USA offers veterans a $10,000 discount off franchise purchase fees. Wilke readily admits that the current credit climate makes funding new franchises much more of a challenge than in the past. Nevertheless, he remains confident about the company’s future. And well he should. His insistence on keeping a close watch on customer demands, ensuring that franchisees have the freedom to do what they do best, and maintaining an abundant and allinclusive product line, HobbyTown remains a model of successful franchising. n

Healthcare

Aseptico Creating Portable Dental Units for Improved Health, Worldwide Produced by Chase Bertke & Written by Molly Cohen Aseptico Inc. was originally founded in 1975 by Doug Kazen as North Pacific Dental. With four employees and two part-time students involved, North Pacific Dental was a mom-and-pop shop manufacturing dental miscellanea for distribution throughout the United States. But the Woodinville, Wash.-based company has changed greatly since its original founding goals. It is now a manufacturer and distributor of portable dental and medical stations that are widely used throughout the world. “Before I got into this business I had advanced education in pharmacology and microbiology and taught that subject at a university in Washington. And as I got into the dental manufacturing business I heard through some colleagues at University of Washington’s dental school there were reasons to be concerned about the quality of water that was being pumped by dental units into a patient’s mouth,” Kazen shares. “We did some research and determined there were high levels of pathogens that were sometimes found in dental water systems. That’s not to say we found a specific case where a patient got gonorrhea from the water, but certainly pathogens were present so the potential for harm to the patient was there. “This research was completed years ago at a time when we were beginning to hear about AIDS, so it prompted us to address how we can make the water the patient is receiving more pure and consistent with public health standards,” Kazen continues. “This led us to realize we had to address the physical side of dental water systems and that in turn led us into portable systems where we could control water systems over a longer period of time as opposed to controlling fixed locations’ water supplies.” Through these realizations, North Pacific Dental evolved from a sundries company into an equipment provider. At that point North Pacific Dental and Aseptico Inc. were sister companies creating different types of equipment. However, Kazen’s wife Edyie, who did all of the companies’ accounting, convinced Kazen it made more sense to roll the companies together under one title. Thus, in 1982 the two entities ultimately evolved to where it is today, and began operating as Aseptico Inc., a straight equipment manufacturer.

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Family Ties, Worldwide Distribution Aseptico is still run by the Kazens’ vision. “My wife is still very active; I can’t get her to stop! And my son, Glenn, now really controls day-to-day operations,” shares Kazen, whose son transitioned to president around the year 2000. “My title is Chairman of the Board, and I really focus on product development because of my background. I am the technical health guru of the company.” Working through distributors, Aseptico’s products have now seen use in more than 50 countries. “We do a lot of business in Europe, South America, Asia and the Chinese government – we’re all over the place,” Kazen says. No matter where they end up, however, Aseptico’s products are designed, researched and assembled by its group of 105 employees. “We do as much as we can in-house; we don’t farm out to foreign countries at all. We make our own electric motors, electric circuitry, design our own stuff and assemble internally as much as we possibly can. We have our own machine shop turning out hundreds of parts, so we keep it internal,” Kazen explains. As for vendors, “we tend to work with companies for a long time unless they run into economic problems. Once in a while we have to find new a supplier for something, but we’re pretty consistent.”

Designing the Future’s Health Options Having such strong internal capabilities allows Aseptico to manufacture and distribute its products as orders are received. “This past month we have just received the first major order from the army for a new surgical sink that is designed for use in field hospitals and field dental clinic operations. Suppose the army has a medical location in the field not plugged into local water, Well, this unit has a supply tank on one side and pumps water and heats it and puts it in the sink where the surgeon can wash up for surgery,” Kazen explains. “It then pumps used water into a waste receptacle on the other side. The Army just completed a long series of tests on the product and made the first order of 600 sinks. It’s a great start for this new product.” An order of this size is a great support to Aseptico. “To us a few million dollars is a very, very nice order and major in our eyes, even if it’s peanuts to someone who is supplying them with tanks and machine gun ammunition or something like that,” Kazen compares. “But it’s very good from our point of view. We’re glad to be on the medical side putting people back together instead of tearing them up.”

However, despite the great use Aseptico’s products have, the company still faced recession challenges. “It slowed our growth and hindered us. It forced us to lay off a number of people, but we’re recovering, we’re expanding our workforce now again,” Kazen admits. “Fortunately we were not in debt and had no external obligations at all. It was a matter of keeping expenses down to a level where we could continue to pay our bills during the recession time, and July 2010 we had our largest billing month we’ve had in the last 18 months. We’re not up to where we once were, but we’re getting up there.” With such optimism and promise of future growth, Kazen is planning Aseptico’s next growth plans. “I don’t think we’ll expand into new markets, but we have new products coming. We have a very active engineering department making new products,” Kazen hints. Any new products the engineering department creates will certainly add to Aseptico’s long list of innovative and essential products that improve lives in situations where the utmost care must be taken to avoid contamination. Aseptico’s future is also the future of people’s health, and together both continue to improve. n

Another example of the difference Aseptico’s products can make is their use in Haiti after the country was ravaged by an earthquake. “We have products that are very applicable to portable and temporary dental establishments and the catastrophe in Haiti resulted in a need for dental and medical care. The Canadian government was quick to respond in terms of buying equipment that was suitable for the field and temporary dental care in Haiti,” Kazen says. “Recently U.S. philanthropic organizations have been buying portable equipment to go to Haiti, too. It’s a long way from the need being over and we’ve got another order or two pending for further dental equipment to go down there. We’ve been pleased to supply units to meet needs down there.”

Manufacturing

Delta Targets Hitting the Bull's Eye Produced by Victor Martins & Written by Carolyng Founded in 1983, Delta Targets is known worldwide as the leading manufacturer of archery targets. Such prestige extends from founder and CEO Lavern Woock, who has always placed the needs of the customer first by making affordable and innovative products for today’s archer. Products range from a full line of tournament and practice targets for bowhunters to realistic decoys that provide an effective, efficient and portable way to attract trophy bucks. Behind every Delta target there is a team of individuals dedicated to designing, building, and selling the very best targets available on the market today. With manufacturing facilities in North Carolina, Mississippi, and the company headquarters in Dike, Iowa, Delta Targets is proud to say 90 percent of manufacturing is done on U.S. soil. With 75 employees, the company has a growing customer database with products available through institutions, archery clubs, dealers, and mass merchants. As for the hard times that many businesses have faced during this economic downturn, when pressed on the subject Woock replies, “What hard times?” Keeping costs contained has helped the company maintain a lean practice, but it has also resulted in slow business. Although business has not returned to pre-recession numbers, the company has taken steps to remain competitive in the market. With three new decoy lines, the need for materials available only outside the U.S. led manufacturing offshore. A small percentage of raw materials come from Central America, and only the turkey decoy (out of all decoy products) is produced in China. This move offshore has ensured that Delta Targets’ products remain affordable and of the best quality.

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The enhancement of mass operations has given Delta Targets an additional competitive edge. After a massive, devastating fire in 2008 the company bounced back with a new, state-of-the-art facility. The manufacturing facility is 100,000 sq. ft. with raw materials storage spanning 15,000 sq. ft., giving the company extra room to grow and expand the business.

and easy transport, adding that Delta decoys are lifelike, highly visible and most of all effective. Delta Targets has hit the bull's eye as a company known for value, innovation, and fun to ensure a brilliant and inventive future. n

In terms of future growth, the company has been in a fiveyear buyout, which terminates November 30 of this year. Though essentially retiring, Woock will stay on to oversee new product development for the company’s first two years under new owners Easton Technical Products in Salt Lake City. The management team, hand-picked by Woock, is made up of passionate individuals who have worked with Delta Targets for years, including future President Jen Kresser, who has been with the company for 16 years. Through a ravaging fire, recession, and change in ownership, Delta Targets has kept to its roots as an American target and decoy production company that values quality, versatility, and fun above all else. “Whether it’s in the backyard, the woods, or at an international, our affordable and innovative products are just what today’s archers demand.” Customers praise Delta Targets for its products' durability, versatility,

Manufacturing

DFI Systems Inc. Offering More than Just the Average House Produced by TaMeka Marshall & Written by Molly Cohen It takes more than wood hammers and nails to put a house together. Someone has to be there to take the project from a dream house and put the pieces together to make it a stable home. In Virginia, DFI Systems Inc. provides that structural reassurance. Located in Hampton, Va., DFI sets itself apart from its competitors by its “method of providing turnkey framing,” according to Marcus Gravely, the company president who has been with DFI since its founding in 2001. DFI is not Gravely’s introduction to construction, however. “My dad was a framer, so I grew up doing it, and I’ve been doing it my whole life,” shares the 25-year industry veteran. Going Above and Beyond Unlike most competitors that build components for wood frame construction, DFI is not strictly a manufacturer; its services go beyond just creating the pieces for a house. “We have crews in the field that install the components and provide the turnkey services for residential and commercial buildings,” Gravely summarizes. DFI’s in-house employees include about 18 people in the company’s shop facility. DFI also has around 20 employees who work in the field, putting the houses and components together. Combining the shop and field efforts, DFI’s annual revenue in 2009 was around $9 million. However, that number is down from the company’s typical revenue, which was $20 million in 2006 and peaked the following year at $23 million before softening in 2008 to $14 million. Planning Ahead As the economy dropped, DFI was forced to examine its expenses to remain competitive. Although DFI uses its own in-house trucking capabilities, it does outsource some parts of the business. “We outsource our roof trusses and use subcontractors for some of the field labor, but we use the same subs month after month

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based on past performance,” Gravely shares. Overall, 60 percent of DFI’s expenses are spent on materials, while the remaining 40 percent is spent on labor. The company was challenged by competitors “undercutting the market and selling below cost to stay afloat,” Gravely remembers. To stay ahead of its competition, Gravely saw DFI had just one option: “To overcome the challenges, we had to provide more services to more builders, including sometimes financing our builders, because they couldn’t get loans from the banks.” Surveying market changes, Gravely sees the economy improving, but not to an extreme level for months to come. “I think 2010 will be better than 2009, but far from good,” he says succinctly. Considering that the economy

will be slow to change for months to come, Gravely has a two-part plan for DFI's customer expansion and cost containment. “We’ve tried to broaden our customer base

and have been fairly successful,” he explains. Gravely’s program is also to cut customer costs by eliminating extra managerial expenses. “Most of our builders don’t need jobsite supervision, because we provide such a large piece

of construction management and remove other management from [clients’] plates. So they don’t incur extra labor fees,” he says. This plan is designed with the future in mind, not just to float the company during the present. “Our growth focus right now is on new customers, not revenue, because if I can triple my customer base now, then when the market comes back I can triple my revenue,” Gravely explains. Based on this plan for the future and a history of successful turnkey projects, DFI Systems has assembled the pieces to emerge a strong presence in the industry once the economy picks up. n

Manufacturing

Amtec Corporation Acquiring Potential to Grow Success Produced by Chase Bertke & Written by Molly Cohen Prior to its acquisition by AMTEC Corporation, Amron LLC was a subsidiary of Pohlman Inc., a St. Louis, Mo.-based supplier of machined parts to the automotive industry. Airbag components were in high demand and became a large part of Pohlman’s business up until 2001, when demand met with a steep decline. Pohlman would fall on hard times, struggling during the next three years to offset the loss of airbag volume, despite its pursuit of new opportunities and increased sales. In February of 2005, however, Glen Butler of Butler and Associates Inc. (B&A) was made CEO and charged with the task of resurrecting both Pohlman and Amron. Butler inherited out-of-term accounts payable that had reached totals of $9 million and $3 million, respectively. Pohlman also had a non-performing term loan of $16 million and several capital leases. Consolidated losses in 2004 had risen to almost $10 million. Turning a Challenge into an Opportunity The first order of business was to achieve a positive cash flow. Doug Faragher, a B&A partner and the newly minted president of Amron, united with Butler to bring both companies back from the brink. It was a task that required some restructuring. Creditors cooperated with a 90-day forbearance request, customers were asked to buy their own materials, payroll was slashed, and under-contributing customers were told to find an alternative supplier. By June

of 2005, it appeared that both Pohlman and Amron were back in the black, with a positive cash flow and with creditors accepting a repayment plan. As a supplier of cartridge casings to the Department of Defense, Amron’s financial woes were considered a threat to national security. To rectify the situation, Amron would need to stand apart from Pohlman. With the blessing of creditors, Summit Manufacturing Corp. became the parent company for Pohlman and Amron in September of 2005. In January of 2006, Amron was acquired by its strategic partner, AMTEC, infusing much needed capital into the company and guaranteeing Amron a bright future. Since the inception of turnaround efforts in 2004, all creditor obligations have been satisfied. Pohlman continues to be a force within the automotive industry, a triumph that has led B&A to continue reviving under-performing companies. Doug Faragher remains president of Amron, diligently working to ensure the company’s continued success. Wide Range of Support With disaster safely averted, both Pohlman and Amron have gone on to become success stories, thanks to the cooperation of creditors, customers and employees, not to mention new parent company AMTEC. And Amron is a largely supportive source for AMTEC. When the government began looking toward prime contractors to coordinate all of its 40mm ammunitions and loading, AMTEC was able to secure a five-year contract in which it supplies 55 percent of the military’s 44mm systems, for which “Amron supplies the shell casings for all of the 40mm, and that’s when AMTEC realized they needed us,” says Faragher. With Amron’s support and an impressive team of highly trained professionals, AMTEC and Amron are capable not only of meeting its clients’ needs, but of exceeding them. The company’s employees are a mix of experienced manufacturing professionals and a base of technologically focused young personnel. To oversee these individuals, AMTEC and Amron’s senior management team is

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constantly on site and working in the field to make the best informed decision on a daily basis. Thus, AMTEC and Amron provide the highest quality ammunition systems to clients, which are joint service warfighters. Headquartered in Janesville, Wis., they have cutting-edge facilities and equipment to ensure its tactical and training ammunition, fuzes, precision fuzing, firing devices and initiators will perform with precision every time they are used. The companyâ&#x20AC;&#x2122;s in-house manufacturing lines

Manufacturing are capable of creating several ammunition items, attributing to the company’s ability to manufacture its own array of tooling and testing equipment. To make its production as efficient and cost-effective as possible, AMTEC and Amron utilize the Six Sigma and Lean approaches to manufacturing.

of AMTEC, Amron has been able to refurbish old equipment with new electronics and PLC controls, add manufacturing space, purchase state-of-the-art machining centers, and streamline its processes to be able to manufacture quality medium caliber shell casings.”

Working with a specific group of vendors, AMTEC has several product lines available. In its low-velocity 40mm rounds, AMTEC offers High Explosive Dual Purpose (HEDP), Practice Cartridges, White Star Parachutes and Non-Lethal Sponge Grenades. In the high-velocity 40mm rounds, AMTEC makes HEDP, Target Practice Cartridges, Practice Cartridges and Mixed Belts. For its mechanical subsystems, AMTEC creates Fuzes and Escapements. For its explosive and testing products, AMTEC has CXU cartridges – which are basically practice bombs – as well as TNT by the quarter pound and TNT by the one pound. The company also makes 20, 25, 30 and 40mm cartridge cases.

AMTEC’s products are also created in part by Spectra Technologies LLC, another subsidiary. Located in East Camden, Ark., Spectra handles the company’s Full Load, Assemble and Pack services. These can include melt casting, press loading, PBX casting, propellant blending and general ordinance assembly.

All of AMTEC’s cartridges are produced in-house at Amron’s Antigo, Wis., location by about 240 of the company’s 285 employees. “We work with brass, aluminum and steel and we do the impacting, deep draw, anodizing, plating, machining, all under one roof,” Faragher explains. “A lot of the processes are 56 years old, but with the financial support

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Recent changes in the military effort affected AMTEC, and thus Amron and Spectra. “The war is slowing down. The 30mm is used in jet fighters fighting against tanks that were used in Iraq, but not in Afghanistan now using rounds for the Apache Blackhawk helicopter. The 40mm round, though, has jumped up; we’re producing over 1 million cases per month,” Faragher informs. “The other big thing is we’re a sole source and have done well keeping the flow to customers. But the military worries that as a sole source, they call us singlepoint failure, because if we would be shut down, it would be devastating for the military. So we’re working hard on back-up suppliers, equipment and contingency plans in case

something would happen.” All of this would not be possible without the financial support of AMTEC.

Although it was originally founded in

With these new projects and the continued support of its employees, Amron and AMTEC will continue successfully supplying the military’s needs. “We think we’re the best at what we do and we’re proud of the people we have here – they do a great job, and that turnaround five years ago never would have happened without them,” Faragher summarizes.

Contingency plans in the 1988, through acquisitions of other works, Amron is looking to companies, Amtec has experience make other changes to its dating back to 1971. Currently Amtec’s facilities and product lines to continue supporting AMTEC’s business is mostly government and productions. “We have to institutional work, with a large focus expand our waste treatment of its services at nearby Redstone facility, which will require additional space to make room Arsenal in Alabama. With more than for additional equipment; With an expert staff, a roster 200 employees, Amtec is more than that’s a $2.5 million project. of specialized services, and capable of meeting its clients’ needs. Another project with be a companies like Amron and 30,000-square foot addition Spectra bolstering its success, for a new product line that AMTEC is equipped to will cost $5.5 million,” says continue its growth well into Faragher. “We are actually the future, offering superior going after a couple product engineering of defect-free lines – a projectile that AMTEC will utilize in its 40mm product backed by a philosophy of open and honest business round, and about two or three other products we’re quoting communication. n on that’s part of the casing market.”

Manufacturing

Baccus Global LLC Innovative and Effective Tools for Auto and Home Produced by Chase Bertke & Written by Molly Cohen Baccus Global LLC is a new, yet already thriving company that manufactures, sells and distributes 12-Volt automotive and lighting products geared to manage emergencies and make travel and outdoor activities safer and easier. The company was formed in 2008 by Matt Inskeep and partners, who collectively brought over 30 years of business experience from working with Black & Decker and other Fortune 500 companies. When Baccus Global began, the company partnered with The Stanley Works to license its brand, one of the oldest and most respected consumer brands worldwide. This was an important move, because “The Stanley brand resonates deeply with both pro and high-end do-it-yourselfers,” Inskeep states. This relationship offered terrific resources for the start-up period of 2008 to 2009. Near the end of 2009, Stanley acquired Black & Decker, and Inskeep found himself in familiar territory once again. This presented a unique opportunity for Baccus Global to capture greater market share without having to only grow organically over time.

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Building Its Lines Working from its Boca Raton, Fla. headquarters, Baccus manufactures and imports its products from its factories in Asia and distributes them worldwide from its distribution centers located throughout North America. The company has around 25 employees and, although it is barely three years old, Baccus has annual revenue upwards of $50 million. Baccus aims to be at the forefront of innovation and wants to remain there by continuously developing new, more environmentally friendly choices to its impressive product list. “There was so much average me-too product in the marketplace that we decided it was time to bring back quality and innovation to this category,” says Inskeep. “We want our customers to know they are buying the best when they put our products in their shopping basket,” he continues. These ambitions also helped Baccus overcome the challenges of being a start-up company during a period of recession.

The Baccus business model challenged the big company status quo by utilizing key senior executives that can handle multiple titles, thus keeping the manpower overhead low. “Our business model relies heavily on the experience of senior executives and key third-party providers that help us manage our bottom line by keeping our costs scalable to our needs,” says Mark Milocco, vice president of operations. “With our model, we can be much more flexible than our competition. From moulding to the demands of the marketplace to bringing new products to the market much quicker are key drivers in our success.” Aiding Baccus Global’s efforts to differentiate themselves from competitors are the innovative, efficient designs of its lines of portable battery chargers, jump starters, power converters, spot lights and work lights. The company’s products have many new features, such as full LCD screens that convey clear information that is easy to understand, battery chargers and jump starters that alert the user if it’s incorrectly connected, and handheld spotlights that are brighter and more durable than most others on the market. Many of Baccus’ original designs are patented, making it one of the few companies in this category to do so. Safety is also in the forefront with Baccus’ products. Retailers appreciate the length that Baccus goes to get its products certified by agencies such as UL, ETL and CTL.

Powerful Products Affordable Price

As of the summer of 2010, Baccus distributes five product types. First are the battery chargers. These are fully automatic tools that make maintaining a six volt or 12 volt battery easy. Once the battery is fully charged, Stanley’s charger switches to its maintain/float mode with no assistance. It is also two to three times faster than other chargers on the market and features a full LCD screen providing the user with feedback regarding charging status, time remaining to a full charge, battery condition and reverse hook ups. This charger works on cars, trucks, tractors, motorcycles, boats and recreational vehicles. This product line includes two, six amp with eight amp boost, 15, 25 and 40 AMP automatic battery chargers. Baccus also has portable jump starters for cars, trucks, motorcycles, boats, RVs and trailers. With this tool, there is no need for assistance from another vehicle. It uses reverse polarity protection technology so the user does not need to worry about the connection. The jump starter comes with a 270-degree pivoting LED light, built-in 120-psi compressor and built-in 120-volt or USB charging capabilities. The line of products ranges from a 300-AMP jump starter all the way up to a 500-AMP jump starter with a built-in compressor. There is also a digital power station available that features a 350-AMP jump starter, a 120-psi compressor and built-

Baccus had one mission in mind when it started … make the best products for the everyday user at an affordable price. “When we sat down and started designing our products, the first thoughts that came to our mind was ‘Simple and Safe’ for our customers,” said Ryan Powers, vice president of marketing. “How do we make these products easy to use and safe for someone that may not be experienced in using these types of tools? With the economy still a bit tough, we also want our customers to know they got their money’s worth when they buy our products.”

Manufacturing in 120-Volt power plug and USB charging outlets. Power converters are another popular tool from Baccus. This product uses a vehicle’s battery and converts it to usable household power to charge electrical devices like cell phones, laptops, game systems, MP3 players and more. This product line-up includes a 100-WATT auto power converter, 100-WATT tailgate power converter, 100-WATT travel power converter, 500-WATT power converter and an 800-WATT power converter with a digital LCD screen that gives the user real-time diagnostics. Stanley has long been recognized for its intense spotlights that are used for outdoor activities, such as camping, boating, hunting and fishing. Each spotlight uses bright white LED, halogen and high-intensity discharge (HID) bulbs. This product line includes a 1M Series Spotlight, a 2M Series Spotlight, a five-WATT LED Spotlight and a HID Spotlight.

“When we sat down and started designing our products, the first thoughts that came to our mind was ‘Simple and Safe’ for our customers,” said Ryan Powers, vice president of marketing. “How do we make these products easy to use and safe for someone that may not be experienced in using these types of tools? With the economy still a bit tough, we also want our

with a system of listening to end users, the team brainstorms to solve needs customers might not know they even have yet, while improving on what is already offered. “We come up with ideas so far different that the same thinking in the forest won't come up with them,” says Inskeep. “You have to get out of the forest to come up with these ideas, which are why we have this team that searches out innovation, while other companies are just concerned with being cost-conscious. Really, when we think about it, what's growing in America is Apple, a product innovation company. I think that's what the world is looking for, so that's how we're investing resources.”

In the last year Baccus Global has used its increasing resources customers to know they got to double its business, and Inskeep forecasts the company their money’s worth when being equally successful in the they buy our products.” To make work areas more accessible, next 12 months as a result of the Baccus also sells work lights, which company's strategic acquisitions are ultra-bright LED and fluorescent and “new product innovations and bulbs that provide a constant light quality, including items coming output. Products include the BarFlex out like a waterproof spotlight Work Light, Pivoting Fluorescent Work Light and that can come into the consumer price range, but will SquidBrite Work Light. outperform what folks are used to,” he informs. “Common complaints are that spotlights aren't bright Baccus’ other product is a solar back-up power generator. enough for a lot of folks, or they're too heavy, or they don't This product uses solar energy for up to eight hours of home last long enough,” Inskeep continues. “But we made a or office power and will even operate in cloudy conditions. light that lasts 10 hours of brightness, producing over 500 It automatically switches to household power when its lumens, and it's half the size and waterproof, plus you can back-up battery is low. It has a built-in surge protector with get this for under $50. It will be out in Christmas, with a automatic shut off. This product eliminates energy waste national TV campaign. We have several more items like and has a digital LCD display showing the input/output this that we'll end up cracking open at the SEMA Show of AC wattage and the remaining battery voltage run time. trade exhibition in November.” There are five power outlets, a USB charging port, a 500WATT power inverter and an LED emergency work light. And if the company’s new products achieve the same This generator only requires do-it-yourself installation. usefulness and quality as its existing product lines, they will be equally successful. The company is becoming a Additional offerings include thermoelectric coolers and dominant force in its sector thanks to its flexible approach battery back-up systems, among other items. The Baccus and structure, its associated brands, and its manufacturing approach to research & development is to have a team base that offers high-quality products at lower costs. As that isn't accountable for day-to-day business, but rather Baccus Global LLC continues to grow its product offerings, they are responsible for thinking outside-the-box on items it can also expand its clientele, thus acquiring a larger to launch in several years. Additionally, they search out portion of the power tool market and furthering its winning inventors who have ideas to contribute. Using this research business model. n

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Barron Lighting Group Directing Light Shed across America Produced by Chase Bertke & Written by Molly Cohen Before becoming the lighting industry leader it is today, Barron Lighting Group was known as the Barron Manufacturing Corporation. Originally the company’s main business focused on engineering and producing printed circuit board assemblies for various industries. However, with the discovery of LED (Light Low Emitting Diode) as a light source for emergency lighting, the company’s business was transformed and Barron Lighting Group quickly began making a name for itself in the emergency lighting and largescale lighting industries. Barron Lighting Group is now known for bringing light to all types of locations and as an expert in customized lighting solutions. The company promises high-quality customer service, unprecedented designs and top-notch products that are time-tested to perform extremely well. Headquartered in Phoenix, Ariz., Barron Lighting Group also has distribution centers and offices in Edison, N.J.; Orlando, Fla.; Dallas, Texas; and Los Angeles, Calif. Innovative Brands Lou Goldman currently heads Barron Lighting Group as its CEO, and he takes the company’s reputation, which stretches back to 1973, very seriously. Along with the assembly business that first established the company’s market presence, Barron Lighting Group began working in emergency lighting when it formed its Exitronix division, which created the first LED exit sign back in 1985. Exitronix has a long list of products, including LED exit signs, emergency lights, emergency ballast, central systems, LED retro-fit kits, remote heads, accessories, nonelectric signs, Chicagoapproved lights, New York-approved lights, lane control lighting, under-cabinet lighting, as well as the ability to create custom signage. The Exitronix brand can be applied to the

architectural, commercial and industrial sectors. It works uncharacteristically well in wet locations, is amenable to government project solutions and is flexible enough to accommodate the design-build approach to construction. Exitronix had a long life as the company’s only brand until 2005, when Barron Lighting Group introduced the Trace-lite division. This part of the company is dedicated to producing the best HID (High-Intensity Discharge) lighting for the industrial sector and for outdoor lighting applications. Trace-lite’s products include wall packs, flood lighting, area lighting, Vandal lighting, high/low bay lighting, roadway lighting, security lighting, bollard lighting and vaporproof lighting. Its products are dark sky compliant, making Barron Lighting Group a leader in manufacturing in indoor and outdoor HID products. In addition to these two brands, Barron Lighting Group also offers specialty LED lighting solutions from its SLP division. These products can include border tubes, flexible border tubes, channel letters and rope light for both indoors and outdoors. “These are mostly products that are sold into commercial applications for highlighting; they are all LED and are used to highlight a jewelry cases or a food cases in a food store or wall washing, like a small little floodlight.

Manufacturing They also wrap trees with LED lighting; we do a lot of that,” Goldman shares. For these specialty LED solutions, and the rest of the company’s brands, Barron Lighting Group offers technical support to meet each clients’ needs. Forward-Thinking Production Products from any of these lines are compatible and can be used together to create the ultimate lighting solution for any client’s requirements. And using products from the different lines is not an invoicing problem, since Barron Lighting Group’s more than 54 employees have the capability to combine and ship complicated orders in a timely manner. In fact, the company is so confident of its in-house strengths that it guarantees shipment within 24 hours on specific items in its “Express 24” program; if the order is not sent within that timeframe, Barron Lighting Group promises a five-percent credit off the next invoice. Admittedly, Barron Lighting Group has faced its share of challenges due to the economic recession, but it has been aided by its confidence and ability to deliver on-time. “We have challenges all the time, but we have always been noted for the service we provide – if we can out-serve the competition, and we find little difficulty in doing that – we usually get the job,” Goldman explains. In addition to its top-notch service, Barron Lighting Group is also known for its dedication to the green initiative. Barron Lighting Group works to make its products and production process as environmentally friendly as possible. “We’re all about energy efficiency, so everything we do is with that in mind. Our whole industry is about LED’s, but we’ve added induction into our lighting, which is eligible for energy tax rebates from the government,” says Goldman. The company strives to continually create or recreate its current products to be more energy efficient and designs them to be EPA approved. It also uses lead-free wave-soldering, while incorporating environmentally friendly components. Barron Lighting Group has invested much of its funding into purchasing state-of-the-art equipment that can break down and recycle old cardboard into reusable packaging material. Each of the Barron Lighting Group brands has its own line of informative literature for distribution to interested clients. This literature is created through an eco-friendly printing process that includes waterless offset printing, chemical-free imaging, soy-based inks and recycled paper. The company’s efforts in these areas were called upon in May of 2010, when Barron Lighting Group finished a large lighting project in downtown Manhattan, N.Y., retrofitting all four of the United Nations’ indoor emergency lighting systems. “It had a big focus on energy efficiency and was a high-profile project,” Goldman remembers.

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With this large and important project completed, Barron Lighting Group took the opportunity to re-evaluate its plans for the future. “We just got through revising our five-year plan. Now we have a high concentration on energy efficiency and we’re planning on growing year-after-year,” Goldman shares. With these initiatives guiding it to future product lines and innovative product components, Barron Lighting Group will continue to create and change the lighting industry. The firm already has a solid reputation for its products and service, and, as it grows, Barron Lighting Group will have ample opportunities to shed light on areas that can benefit from system improvements. n

Energy & Power

Gastar Exploration Ltd. A Cyclical Approach to Exploration and Production Produced by Matt Duncan & Written by Molly Cohen

Gastar Exploration Ltd. is an ambitious exploration and production (E&P) company with experience drilling for oil and gas on the international level. However, the company, which was founded in 2000, is currently focused on its United States’ locales out of its Houston, Texas, location.

Russ Porter was not one of the founding members of Gastar; however, he has 19 to 20 years of experience in energy operation and about five years of energy financial experience. He now serves as Gastar’s president and CEO. “I think our strength has been identifying plays early in their life and establishing a position there,” he says of his company. International Resources for Nationwide Support As of the summer of 2010, Gastar has 33,000 acres in east Texas, between Dallas and Houston where the company is involved in the Deep Bossier plays. In the Appalachian region (specifically West Virginia and Pennsylvania), Gastar has 40,000 net acres under lease where it is drilling the Marcellus shale plays. Lastly, Gastar has 55,000 gross acres in the Powder River Basin in Wyoming where the company is involved in the coalbed methane (CBM) sector. However, an example of the company’s full cycle capabilities focuses on its assets in the Gunnedah Basin of southeastern Australia. “We acquired a position in a CBM basin in Australia back in 2000 when the company was formed and added to it in 2001 after I joined the company,” says Porter. “We participated in initial development and proof of concept and we spent about $50 million Australian to buy it and recently sold it for $120 million Australian. We used the proceeds to pay off all of our debt.” Additionally, Gastar acknowledges it was an early mover in the Deep Bossier play. And, although it was not the earliest, it considers itself an earlier mover in the Marcellus play; it got started there in 2007. Combining revenue from all of its focus areas, Gastar’s gross annual revenue are project to be in the $40 million range. And Gastar’s profitability is due in large part to its stable finances. “We’re fortunate in that our balance sheet is very strong. We used the proceeds from selling the Australian property to pay off our debt. So our challenges now are growing the company in a play like the Marcellus where there is a lot of competition for acreage and ever-rising prices of leases,” Porter acknowledges. “So the challenge for

Energy & Power us is to capture and maintain a position that is of value to our shareholders. We’ve done that, now we have to execute on that. We’re focused now on internal execution.” This goal to improve internal execution may be hindered by recession effects. “With any smaller E&P company, the largest challenge is access to capital. We try to make sure we access capital at the lowest cost possible. We do hedge our natural gas production in order to smooth out predictability to our cash flow. We will be buffeted by macro factors a little bit more than larger guys,” says Porter. “We’re the type of company that results from individual wells can have a significant impact. So you’re going to have risk associated with making sure you can execute on all your different operations so you don’t have any surprises.” In addition to financial challenges, Gastar also faces market issues. In many ways natural gas is an underused energy source, despite its large levels of production. “I think natural gas is still not understood for the benefits it can bring to the U.S. We have to do a better job of defining what natural gas is so people can understand its reliable, safe, abundant and cost effective to use to generate more of our electricity and then if you throw in the environmental advantages, it’s an important part of energy supply in the U.S.,” Porter urges. Completing the Cycle And Gastar will be ready to supply the natural gas to fill those needs. While the company’s 26 employees handle much of the company’s work in-house, it subcontracts the drilling aspect to companies like Trinidad Drilling Ltd. and Nabors Drilling USA LP. And, “we contract out some of the completion services to companies like Halliburton and BJ Completion Services,” says Porter. Since so much of its work is in-house, it is important for Gastar to retain its reliable and skilled workforce. However, this has not been a challenge for Gastar; “We have a small staff so everyone is very involved in the overall success of the company. Because we have a small staff we run very lean and we compensate our folks on the higher end of the scale for their respective positions, however we usually expect them to perform more than one traditional role,” Porter explains. “I think we have a very congenial atmosphere here.” The core of Gastar’s team, which includes geologists, geophysicists, reservoir engineers and drilling engineers, have been together for a long time. “Most of the key individuals who are Gastar’s team are recruited through exposure to them, working through a partner of ours or through word-of-mouth and references from mutual acquaintances in the industry,” Porter explains. And these employees were a contributing factor to the company’s success in its newest venture into the Deep

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Bossier plays. “We’re drilling up to 19,000 foot deep natural gas wells. We’ve been very successful – 28 out of 30 wells have been successful,” Porter shares. “That’s a project that continues to generate good returns for the company, gives us good production growth. It’s also a property that in the right market we would look to divest and look more closely at resources type plays.” And Gastar plans to spend about $55 million drilling in east Texas and the Marcellus play to continue their successes. “We will probably continue to run at least one rig in east Texas drilling Deep Bossier wells and ramp up to about two rigs full-time in the Marcellus play,” says Porter. In the next one to two years, Porter hopes the company will be in a position to “realize a meaningful sale of the east Texas assets or have them generate access cash flow that we can use on Marcellus and we’re focusing on resource type plays and will continue to build value for the shareholders,” he says. And with the company’s history of successful, full circle properties, Gastar has the experience and loyal employees to reach its goals and begin developing in any new areas of energy exploration and production it sets its sights on. n

The Greer Commission of Public Works Pumping Resources Throughout its Community Produced by Zach Smith & Written by Molly Cohen

The Greer Commission of Public Works (Greer CPW) was created by the citizens of Greer, S.C., in the election of 1913 for the purposes of providing electricity, water distribution and sewer collection and treatment to the residents of the municipality. In 1958 the City of Greer’s City Council enacted an ordinance that founded a natural gas unit to be added to what is now the present-day “system.” Located in the upstate region of South Carolina, between Atlanta, Ga., and Charlotte, N.C., the City of Greer occupies portions of both Greenville County and Spartanburg County, S.C. Greer CPW offers a reliable and comprehensive public utility capable of supporting Greer’s growth, while preserving Greer’s small town charm and the spirit of cooperation among citizens, government, and public service groups that makes Greer so special.

exists to serve our customers as efficiently and as costeffectively as possible,” Stegall says. “Through the years, our talented employees, and previous General Manager Jerry Balding, have demonstrated commitment to our customers and invested in the Greer community itself.” Greer CPW provides 133 jobs for the Greer community and donates a portion of its $80 million annual revenue to local charities, including Greer Relief – a United Way agency, Greer Community Ministries, Meal on Wheels, the Miss Greater Greer Scholarship Pageant, the Greer Historical Museum, and a host of other community causes.

“The Greer CPW’s three-member local commission supports the organization with their experience and knowledge of the area, giving us flexibility and an edge,” says Nick W. Stegall, Greer CPW’s general manager. “The citizens of Greer want a comprehensive public utility that knows how to lead and understands when to follow.” This flexibility is appreciated throughout the City and by Greer’s 50,000-some customers – many of which rely on multiple utility services. “Our Commissioners have done a tremendous job in sending a very clear message that Greer CPW

Energy & Power Customized Services Noticeable through its extensive community involvement, Greer CPW is committed to meeting the city’s needs in varying ways. “When the City of Greer, the Greer Development Corporation and Greer CPW sit down with a potential client, we can speak with authority about what we can and can’t do,” Stegall explains. “We can talk to mom and pop opening a restaurant; we can deal with franchise organizations; or we can deal with large industries that have special needs like high pressure gas service or a dedicated transmission line and electric substation. And we can make decisions quickly because we are not relying on corporate decision makers in another community or even another state.” As an independent company, the Greer CPW offers an alternative for residences and businesses throughout Greer that are looking for a utility that is able to cater to their needs. “The flexibility we have is unique to this area,” says Stegall. “That’s what BMW and Mitsubishi Polyester Film have found attractive about us – we serve them with water, sewer and natural gas, and we do it in a way that maximizes their production schedule while keeping overhead expenses manageable. These and other international firms

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are very involved in the community and willingly serve as ambassadors for the region.” Resourceful and Respectful Utilities The Greer CPW pulls its resources from numerous sources. For example, the organization’s water originates from two water reservoirs: Lake Cunningham, which allows the company 280 surface acres and is home to Greer CPW’s water treatment plant; and Lake Robinson, which offers 800 surface area acres and is where Greer CPW focuses its

environmental health and sustainability efforts. Over the years, Greer CPW, in association with the South Carolina Department of Natural Resources, has worked to redesign Lake Robinson’s habitat into an area that attracts animals while protecting the water source. Environmental goals at Lake Robinson culminate with the Carolina Fence, which was constructed around the lake and is now considered a state symbol thanks to the cultural and natural aspects it contains. The fence’s split-rail design perfectly supports Carolina Jessamine vines, South

Energy & Power Carolina’s state flower. With the help of local Boy Scouts and Girl Scouts who build bird houses for the habitat, the state bird the Carolina Wren has a year-round home at Lake Robinson. The fence also includes a block of Carolina Blue Granite, the state’s official stone. While Greer CPW owns its water sources, it purchases its electrical supply from the Piedmont Municipal Power Agency (PMPA), a 10-member organization. This wasn’t always the case, however. When Greer CPW first started supplying electricity in 1914, it generated its own supply. In 1927, it switched to purchasing electricity from Duke Power. In 1985, Greer CPW became one of PMPA’s charter members. PMPA is a joint action agency formed by 10 municipal electric utilities in the northwest section of South Carolina. The Agency provides wholesale electric service to its Members primarily through a 25-percent ownership interest in the Catawba Nuclear Station. In 1957 CPW signed a contract with Patterson-Ford Construction Company to build a natural gas transmission line and distribution system. Greer CPW now receives its gas via this system, drawing from the Transcontinental Gas Pipeline. Greer CPW’s natural gas services are supplied using 450 miles of gas pipeline and over 100 distribution stations. Meanwhile, Greer CPW uses 206 miles of gravity sewer line to collect wastewater from its customers and transport it to the newly upgraded Maple Creek Wastewater Treatment Plan. Greer CPW recently finished an upgrade that gives the facility a capability of processing 5 million gallons-perday (MGD), with an additional upgrade targeted to reach 10 MGD. n

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Phoenix Drilling Inc. Experience and Versatility Produced by Matt Duncan & Written by Amy Bonn Brad Liggett, president and 70-percent owner of Phoenix Drilling Inc. (Phoenix), is no stranger to the oil and gas business. In a career spanning 42 years, he worked his way up in the industry, starting as a rig hand in oil fields and then running equipment and drilling on rigs. He eventually became a drilling superintendent and then founded Phoenix, a gas and oilfield drilling company, with his business partner, Dennis Chidester, in 1999.

and New York, with a small amount of work in Arkansas and Wyoming. The company is officed in Buckhannon, W.Va. Earning around $25 million yearly in revenue and employing approximately 150 workers (up to 200 when all of the companyâ&#x20AC;&#x2122;s rigs are running), Phoenix has great assets in its strong local presence and reputation.

Phoenix does its drilling in the Appalachian Basin, working mainly in Kentucky, Virginia, West Virginia, Pennsylvania,

The company is able to be flexible regarding their clientsâ&#x20AC;&#x2122; needs for particular drilling projects by being equipped with rigs of varying sizes for different drilling programs. Phoenix offers small rigs for small, vertical wells; larger rigs for horizontal Marcellus wells; and Devonian shale wells for work in Kentucky and Virginia. The companyâ&#x20AC;&#x2122;s rigs can drill to depths of 15,000 feet. Since its inception, the company has strived to stay prepared and equipped for many different rigging needs, and those needs have evolved over time.

Well-equipped for Client Needs

According to Liggett, there was very little horizontal drilling in the Marcellus shale throughout the Appalachian Basin before about a year and a half ago. To further capitalize on the fairly rapid increase in Marcellus drilling, Phoenix has expanded in the last two years with the founding of Braden Drilling LLC (Braden), which is run by the same principals (as well as one additional outside partner), and which employs the same drilling managers. Braden does only Marcellus drilling and is equipped with three rigs. Clients can be assured that Phoenix offers not only the requisite equipment for their drilling needs, but the expertise as well. The company recruits its personnel mainly based on the knowledge and connections acquired by Liggett and his partner during the last several decades of working in the

Energy & Power

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oil and gas industry. The company hires individuals who are known quantities, who have demonstrated their skills, and with whom the Phoenix leadership has worked in the past. Liggett notes that the company’s drilling engineers in particular have a great deal of relevant experience in the field. The company does not subcontract for any drilling work. The company retains its staff due to its family environment and the premium wages and benefit packages offered to employees. According to Liggett, at Phoenix, “You’re not a number like you are in some large companies.” A Prescription for Steady Growth Liggett cites cost effectiveness as a major challenge over the next few years given the current state of the national economy. He observes that with gas prices decreasing, operations will be searching for contractors who can be both cost effective and successful in drilling wells. Liggett notes, “I think that’s going to be a big challenge—keeping your costs in line and still being able to be out there and compete with your competition.” Though the economic downturn has not had a profound direct effect on Phoenix, the company has had to deal with

the ripple effect of the decrease in gas prices. Liggett does predict that the oil and gas market should be greatly helped once factories and industries get back on their feet, as gas usage takes place in those sectors far more than through home use. As far as future plans for the business, Liggett notes that Phoenix’s leaders are taking it one step at a time, adding that “This economy still has me a little bit nervous, so we just try to slowly grow, but not grow so fast that we can’t control it.” Historically, the company has acquired an average of one additional rig per year since its inception. Because of the recent economic downturn, Phoenix will proceed cautiously and may or may not add a rig this year. The leadership of the firm has also been able to negotiate with its vendors to keep prices down on major expenses such as drill pipe and drill bits due to the fact that Phoenix has had to lower its own prices for many services. Liggett reports that Phoenix’s plans for the future are to retain its experienced and highly skilled employees and to demonstrate steady growth. The history of the company and the experience of those leading it certainly suggest that Phoenix will be able to continue along its current path of stability and progression in the industry. n

Energy & Power

Mountain V Oil & Gas, Inc. Establishing a History of Energetic Growth Produced by Matt Duncan & Written by Shelley Seyler In today’s energy-conscious society, most Americans are aware of the importance of oil and gas in their everyday lives. It is also fair to say that many don’t think about its lynchpin status until crisis strikes or discussion ensues. There are companies, however, that are extremely proactive when it comes to the country’s natural resources, understanding the benefits of smartly harnessing them

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both for the nation and themselves. Mountain V Oil & Gas has strived to achieve the resolution declared upon its founding in 1994: to be the most profitable oil and gas production company of its size in West Virginia. Founders Mike Shaver and his father, Steve, have expertly guided the company to achieve exponential growth and benefit from ongoing changes of structure and internal operations.

“My dad started the company with no money and no deal. We borrowed money from a friend to get started and we have built and grown since ’94,” explains Mike. In its history, Mountain V has divested and reestablished the company on two separate occasions. “We are on our third rebuilding now,” says Mike, who acts as president. “We have sold selective assets of the business and rebuilt. They were positive changes.” Mountain V Oil & Gas is headquartered in Bridgeport, W.Va., and operates throughout that state and in Pennsylvania. Since its inception, the company has drilled over 520 wells in these two states and acquired even more. Always transitioning its efforts to be most efficient, Mountain V currently owns and operates approximately 441 oil and gas wells on 46,000 acres. Mountain V retains a vice president of operations who directs the daily aspects of the business. Additionally, a controller oversees the accounting and a completions supervisor manages the drilling activities. The company partners with subcontractors for a majority of its trades, such as drilling, engineering and geological services.

Energy & Power “We also have support staff and guys in the field. Most of them have been here for six to 10 years. It’s a good work environment and we have an open door policy that keeps them here,” contends Mike. “That’s No. 1 with us.” Mountain V is active and respected within the oil and gas profession as a member of the Independent Petroleum Association of America and the Independent Oil and Gas Association in West Virginia. The company is an admired member of its local community, actively contributing to the MakeA-Wish Foundation and the United Way. This is

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Energy & Power an intentional piece of the company’s business operations. “We have a local presence and working relationships with people. We have always had strong PR and we try to be stewards to the environment. We do a lot of community stuff and sponsored events,” affirms Mike. Mountain V also benefits from its location. “We are sitting on the location of one of the country’s biggest resources, and we are just five hours from the nation’s capital,” states Mike.

The resource to which he refers is the Marcellus Shale, a unit of sedimentary rock that extends throughout much of the Appalachian Basin. The shale contains natural gas that the company has been able to target. In fact, Mountain V is currently working on further developing the north central West Virginian portion of the Marcellus Shale. The company has drilled seven flourishing wells and is active on the eighth. “The first seven have done well; we’re pleased with the results,” asserts Mike. In the beginning, Mountain V averaged about two to five wells each year, increasing that average to 100 in the 2007 and 2008 years. Despite the tenuous economy, Mike confidently predicts this growth to continue. “We are just in a different mindset from drilling shallow wells to the Marcellus Shale. We won’t be drilling 100 in Marcellus, but maybe 10 to 20 this year,” he expands. Mike admits he has an ambitious vision for the company. “I don’t want to be the biggest or the best, I just want to be the most profitable. That’s what we’re here for.” With its valuable lessons learned and even more valuable resources possessed, Mountain V Oil & Gas has what it needs to reach its goals. n

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The Independent Petroleum Association of America

Advocates for America’s Energy Autonomy Produced by Matt Duncan & Written by Tony Ware Successfully advocating on behalf of America’s oil and natural gas producers for more than 80 years, the Independent Petroleum Association of America (IPAA) continues to stand as the primary voice for American exploration and production as another decade rolls over. The IPAA is driven and led by a robust membership of over 5,000 producers and service companies, who along with an experienced, award-winning staff earn and maintain the Association’s strong reputation year-in and year-out.

Association’s regional directors and board of directors, Russell is quick, though, to also point towards the IPAA’s executive leadership for its fundamental role in guiding the IPAA’s policies, voice, and success. Leading the dynamic set of leadership the Association enjoys is Chairman Bruce Vincent who, alongside Vice Chairman Gigi Lazenby, began his two-year term last November.

Ratified in 1929 following a presidentially mandated conference on petroleum conservation management, the IPAA has grown from a small group of oil operators, royalty owners and landowners into the foremost industry advocate, working alongside several dozen national, state and regional associations to assure networking opportunities, coordinate investment possibilities and facilitate the effortless exchange of educational materials and information on the nation’s vital and homegrown production of oil and natural gas resources. Leading the way for the industry in Washington and in the national media, the IPAA has, in the closing months of 2009, established a set of core policy initiatives and laid an impressive amount of groundwork to close the past year in a positive direction and prepare for 2010. These efforts have been guided by a volunteer board of directors and leadership structure that IPAA President and CEO Barry Russell believes has resulted into one of the “strongest, most unified voices for the industry in Washington, D.C.” Russell has been an integral part of the Association for the past 30 years, serving in various capacities until being named president in March 2000. Working closely with the

Previously serving as IPAA vice chairman, Vincent, president of Swift Energy Company, brings a focus on media relations to his new role – a focus that has become pressing as energy issues continue to rise on the national conscience and one that compliments well the bolstered efforts by the IPAA’s staff in Washington – on Capitol Hill and with the administration. Led by Russell, Vincent and Lazenby, the IPAA’s efforts are now focused on four core policy areas. In consideration of the actions and posturing by Congress and the Administration over the past year, and with respect to the

Energy & Power points most vital to the sustained success of the industry, IPAA has committed itself to the matters of energy taxes, regulatory issues (particularly hydraulic fracturing and climate change issues), increased oversight and regulation of the financial markets, and access to future markets and market share for oil and natural gas. The Obama administration initially targeted the oil and gas industry for massive tax hikes last February, offering a $31.5 billion tax increase on American oil and gas producers in its initial budget draft proposal. This threat grew to include almost every single industry tax incentive and cost recovery mechanism. Items selected for elimination have included: intangible drilling costs; percentage depletion; the Marginal Well Tax Credit; the Enhanced Oil Recovery Credit; amortization of G&G Costs; a new Gulf of Mexico production tax; the Manufacturers Tax Deduction; Passive Loss Exception; repeal of the deduction for tertiary injectants; changing LIFO to FIFO inventory valuation; and changing the treatment of dual capacity taxpayers. Though the list is intimidating for the IPAA and its allies, for nearly a year the Association has aggressively opposed the tax proposals and worked to educate lawmakers about their consequences to America’s independent producers. Successfully kept at bay in 2009, tax threats to the industry remain on the table in 2010, and the IPAA has pledged not to relent in its efforts, realizing that with the massive deficits the U.S. government now faces tax increases of some sort will likely be on the horizon. The industry also faces well-funded “anti-development” organizations’ efforts with aims to compromise the drilling and completion techniques that have enhanced and improved energy development for decades. With this in mind the IPAA has strengthened its education work on Capitol Hill to help lawmakers better understand that the current regulatory environment for exploration and production techniques, such as hydraulic fracturing, have been effectively regulated by the states for 60 years. “Finding success with the IPAA-led coalition Energy In Depth, and its state of the art Web site and communications outreach program, the industry has established a strong voice with Congress and in the media on hydraulic fracturing, and have kept misguided legislation to mandate federal regulation and require chemical disclosure from advancing further in the US House and Senate,” says Russell. “Thanks in large part to the aggressive education efforts of Energy In Depth, Congress is beginning to understand the importance of shale gas in America, and how shale can change the future of U.S. energy supply. This progress is essential to not only issues related to hydraulic fracturing, but also in the face of other regulatory threats and the

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looming continuation of climate change debate and legislation, a very important position from which to frame the importance of oil and natural gas production in the nation’s future energy supply.” The IPAA has also become more involved lately with the matter of increased oversight and regulation of the financial markets. Over the past year, and dating back even to the emergence of the economic crisis in 2008, Congress has looked for ways to provide greater transparency and oversight of the financial markets, including the overthe-counter (OTC) markets. This is an important tool for America’s oil and natural gas producers, and a proposal that would significantly change the nature of the industry. Legislation remains pending on this matter, and the IPAA is prepared to see this issue carry out well into 2010. The fourth priority for the IPAA in the year ahead is one that Vincent acknowledges is “perhaps more comprehensive than perhaps the others, but deals with the crucial issue of access to future markets and oil and natural gas’ share of these markets.” “While it is easy to get lost in the intricacies of energy policy debates, at the heart of the matter is almost always a battle over future market share,” said Vincent at last year’s Annual Meeting. “Multiple sources of energy have entered into a worldwide battle for market share – solar, wind, coal, nuclear, biofuels, geothermal, oil and natural gas, among others. These players all want as much of the future market as they can get and are each determined to direct policy initiatives that favor their own ends. Over the next two years, the IPAA has made it a priority to differentiate oil and natural gas from the rest of the energy resources available.” As it has since its inception in 1929, IPAA recognizes in 2010 its essential role on behalf of independent producers to stake the industry’s claim and help policymakers realize the critical role oil and natural gas will play. Domestic oil and natural gas power the American economy by creating jobs and revenue, strengthening national security, creating a cleaner environment and greatly reducing our dependence on foreign sources of energy. And with critical leadership roles established and an experienced Washington staff prepared and focused for the year ahead, the IPAA appears once again poised to lead the industry forward in the following months and indeed the decade ahead. n

Western Energy Alliance Positioning the Intermountain West within the Energy Industry Produced by Matt Duncan & Written by Molly Cohen Western Energy Alliance, formerly the Independent Petroleum Association of Mountain States (IPAMS), continues to represent over 400 member companies and their hundreds of thousands of employees across the West in matters of federal land policy, environmental regulation and that impact the natural gas and oil policy accordingly. Executive Director Marc W. Smith leads the Western Energy Alliance – a non-profit representing hundreds of

independent natural gas and oil producers, service and supply companies, banking and financial institutions and industry consultants across the Rocky Mountain region. “We are a 36-year-old organization that has built a national reputation by working constructively with government, academia and local communities,” says Smith. Since he joined the organization in 1997 as the director of public lands and the environment, Smith says he immediately saw both the industry and the association were heading in a new, advantageous direction. Smith, who became the association’s executive director in 2000, explains that in the late ’90s the Clean Air Act amendments fundamentally changed the demand picture for natural gas, because this energy product adheres to more stringent air quality standards. “Most of the electric generation that was built over the next 10 to 15 years was almost exclusively natural gas-fired. At the same time, significant breakthroughs in technology and know-how led a renaissance in oil and gas activity in the Intermountain West that was natural gas-focused,” Smith summarizes. “In a short period of time, the region saw dramatic growth. We doubled our membership, our budget grew from $200,000 to today’s $2 million, and our responsibility as the voice of independent producers in the Intermountain West grew. “We have evolved into an alliance of people and companies dedicated to responsible use and development of energy in the West,” continues Smith. “Our purpose and mission is to have our organization better positioned to advocate for energy solutions that create jobs, strengthen the economy, and improve the environment.”

Changing Roles What makes Western Energy Alliance different from other associations is its expertise in energy policy on federal lands, a critical point as more than 50 percent of the western United States is made up of federally owned land. Since public land laws and regulations allow for public

Energy & Power involvement in land use decisions, it directly correlates to public involvement in oil and gas activity. “It’s a constant, ongoing challenge to ensure that our companies get the certainty and predictability they need when they conduct business in this region,” says Smith. “This includes getting permits in a timely manner and making sure the regulations are appropriate and fair, so that’s been a big part of our mission and continues to be today.” While the public land use has been a consistent issue, over the last couple of years Western Energy Alliance added an offensive component to its historically defensive stance for the industry. This approach looks at the impact of natural gas demand shifts. “Several factors caused us to move in that direction,” Smith shares. “One was the rapid growth in oil and gas reserves across the country, including many of the big shale plays everyone is familiar with. The other factor was the potential for market distortions brought

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on by changes in policy – whether that be cap and trade legislation or federal renewal of portfolio standards (RPS), or hydraulic fracturing legislation.” As a measure of gas demand, Western Energy Alliance recently commissioned a study, conducted by BENTEK Energy. The study looked at the integration of wind power with traditional fuels, and the findings revealed just how important natural gas can be for renewable energy based on emissions. For example, when wind power in Colorado is supported by coal as fuel, emissions increase because coal-fired power plants have to quickly turn down their output and then quickly turn it back up when the wind is not blowing. These plants are not designed for such fluctuation; in fact, they are less efficient and actually produce more emissions than if wind power was not used in the first place.

“We are a 36-year-old organization that has built a national reputation by working constructively with government, academia and local communities,” says Executive Director Marc W. Smith.

“The study points to a need for policymakers in Colorado and throughout the region – and even the federal government and Congress – to look at how best to integrate wind with coal and natural gas,” Smith summarizes. “Really, the important takeaway is that if you’re going to add a lot of wind to the system you’ll need a lot of natural gas, which is a flexible, clean fuel, to mirror the characteristics of wind. If you don’t have the natural gas on the system you may end up polluting more than if you didn’t use wind.” The second part of Western Energy Alliance’s evolving approach is in public perception. “Today, we have some of the best public affairs professionals in the business that are able to generate and respond to around 400 media requests per year,” Smith touts. “It’s a combination of generating and responding to news, which provides an important value to our independents in the region who want to make sure our side of the story is being covered.” To maintain its public affairs position in the future, Western Energy Alliance began supporting candidates from the Republican and Democratic parties that are prodomestic energy. “We are working with members of both parties to try to find and develop leaders in this region that can really help with our long-term strategic, regional competitiveness,” says Smith. Making Industry Changes To propel this evolution to an offensive company, Smith saw the need to harness smart and strong leaders in the industry who were ready to make a change. “We’ve been very fortunate and continue to be fortunate to have the most successful hardworking industry executives in the region at the helm, and they have been a big push on the public affairs side; they’ve responded favorably to our efforts to build out one of the best public affairs program in the association world,” says Smith. The increased funding allowed Western Energy Alliance to build a top-level government affairs department and bring

on staff in Utah and a contract lobbyist in Washington, D.C. Western Energy Alliance also expanded its association industry gatherings to two or three big conferences per year, a 700-person black tie gala and a summer annual meeting. Furthermore, Western Energy Alliance has a distinguished speaker series that features internationally recognized experts who lecture on trends and developments in the industry that are shaping its future; additionally the organization distributes valuable information on these same issues and advances to its members through its “Wildcatter Weekly” bulletin. Ultimately, one of Western Energy Alliance’s foremost goals is to create networking opportunities and the development of relationships, which comes naturally thanks to an informed, impassioned and personable staff. “Again, it’s always been the people that have been the central recipe for our success,” Smith reiterates. “We’ve had great presidents since I’ve been here. I couldn’t ask for a stronger lineup of leaders that have all the respect in the world from their peers, have great insights into where our association can add value in terms of companies that try to find success in the Rockies.” And Western Energy Alliance’s success transfers to all of the other oil and gas associations in the region. “To my knowledge, Western Energy Alliance is the only regional trade association that represents not only producers, but also service and supply companies across a multi-state region. It’s been a formula that really works because there are so many issues impacting the entire industry that cross state boundaries,” Smith explains. There are several issues that cross state boundaries; these issues include air quality regulation, federal land policies and endangered species protection. “It would be an enormous duplication of efforts for every state to try to understand or have meaningful input on these issues,” says Smith. “It takes a critical mass to do the things we are trying to do, so we’ve had the support of our companies to build out an extremely effective organization providing billions

Energy & Power in dollars of value to our member companies each year in terms of not only getting our messages out through the media, but also avoiding unnecessary costs that would limit our company’s ability to produce more domestic energy.” The next challenge Western Energy Alliance will focus on is regional competitiveness. The increases in technology created a large increase of natural gas reserves across the country, “so there’s no doubt natural gas will play an important long term role in country’s energy supply,” says Smith. “The questions now are who is going to supply that natural gas, where is it going to be produced? We would like to see the Rockies be a major source of the nation’s clean energy and we are trying to position the Rockies in that way.” Based on the success of its current initiatives, Western Energy Alliance has plans for its next steps. It will continue with its ongoing efforts across states in the region to provide technical information on how best to integrate wind with natural gas and trying. Western Energy Alliance is bringing this topic to a broader scale “through a new forum concept called the Integrated Energy Forum, which will bring together leaders and researchers from the industry, government, business, academia, finance, technology, the media and NGOs to help define the strategic priorities, research questions and innovation that will lead to sustainable energy future,” Smith explains. “We’ll be hosting these forums across the region over the next year to look at electricity, transportation and commercial, residential and industrial energy use.” Western Energy Alliance is an organization with a long history of protecting and supporting its member companies in the oil and gas industry. Now, with its aggressive agenda for the next few years established, Western Energy Alliance has increased its ability to help its member companies and make a national impact as they navigate the ever-changing domestic oil and gas industry. n

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Ballard Petroleum Holdings LLC The Energy to Explore an Industry Produced by Matt Duncan & Written by Molly Cohen Bill Ballard began his career working for Phillips Petroleum in 1956, following his graduation from Oklahoma University. After bouncing around a couple Phillips offices, Ballard was transferred to the Bartlesville, Okla., location, where he met Bill Cronoble. In 1963, the two partnered and left Phillips to create their own company in Billings, Mont. By 2001, Ballard had created and sold several exploration and production companies in the energy industry, some with Cronoble and one his own. Ready to start a new venture, Ballard, along with sons Dave and Jeff, created Ballard Petroleum Holdings LLC (BPH), a development company backed by Ballard’s longtime investor group. Strength in Employees BPH acquired several core production facilities that provided the overhead necessary to acquire more properties. BPH makes these properties more attractive and then sells them to bigger companies. The revenue is then split between the investors. The company’s 35 employees are split between the Billings headquarters and the production office in Gillette, Wyo. BPH does the exploration, production and operation of its wells. Right now the company has about 75 wells in Wyoming and a couple in North Dakota, and BPH has been known to work in Montana, as well. BPH can handle the project construction and management in-house, but rents the necessary equipment to complete production. “We contract for rigs,” puts forth Ballard. “We operate the projects, but hire contractors with the hardware, the rigs and so forth. We do acidizing and cementing, but contract for the equipment.” The company’s greatest strength is its stellar staff members, says Ballard, who explains, “We have a really great exploration staff. They were kids when we first hired them, and we brought them along so they have great experience

working the areas we operate. We think we have the best exploration staff in the northern Rockies. We’ve had some good success with them. In fact, today we even had a new discovery in Wyoming.” Exploring Future Success Even with a proven system in place, BPH has been forced to adapt lately due to changes in the industry and legislation. Ballard lists working with the Bureau of Land Management (BLM) as one of the company’s biggest challenges, due to permitting difficulties. The BLM owns the minerals in the area BPH tends to work, which creates the first road bump. Paired with the Endangered Species Act BPH adheres to, “… sometimes it can take years to get a permit to drill a well,” Ballard laments. An example of this struggle was apparent when BPH made a discovery about six years ago. It was a small oil field in the Powder River Basin, located in Montana and Wyoming. Using an already-established permit, BPH was able to successfully drill two wells on that field, and Ballard recognized the possibility of a third well on the oil field. Now, over half-a-decade later, BPH is still in the process of off-setting the original permit with a new one. “They

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won’t give us a permit because once we do one study there’s always another study they want us to do,” Ballard explains. “It takes about five days to drill a well and uses about an acre of land with surface facilities, but it’s frustrating when you have to keep doing these tests.” Also frustrating to BPH are organizations looking toward alternative energy while ignoring the proven benefits of traditional energy resources. While Ballard thinks it is a good idea to develop innovative alternative fuels, he hopes

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Energy & Power they will “… be economic for goodness sakes! Wind power works when the wind blows, just like solar power works when the sun is shining. But they don’t even equal fossil fuels,” he explains. Ballard, who has been involved in the global climate change discussions, foresees fossil fuels will remain as an industry standard “… even though they aren’t politically very popular.” Another major issue for BPH is the slow economy. The

company’s annual revenue is usually around $20 million to $25 million, but in 2009 it dipped. “We’re at the mercy of whatever the oil price is, and last year it was not a good year – prices went down to the $35 [a barrel] range,” Ballard reflects. “Our cash flow is determined by the price of the oil we sell, and that really impacted our budget, but it’s coming back and we’re doing well at the moment.” In 2009 the company had an ambitious budget to drill 20 wells, “but we had to keep revising the budget … we only drilled four wells … but we’re already on our third well now in 2010 so we’re doing well,” says Ballard. Even with BPH’s plans affected briefly, Ballard is hoping to continue building the company as jobs continue coming. “We own the building here in Billings and we’ve got it set up to hold 50 people without having to look for another office space, so we would like to do that,” he explains. “We’re gradually getting our act together here. If the government will leave us alone long enough, we’ll be ok.” Based on Ballard’s knack for efficient business in the industry and his steadfast employees, Ballard Petroleum Holdings should accomplish this strong rebound and fulfill its ambitious aspirations for business as the economy slowly improves. n

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